New high

25 April 2008

The lifting sector showed it was fully recovered from this summer’s slump in share prices, as it charged to a new high of 472.85 points at the end of week 47. This peak eclipsed the previous high of 461.26 points, which was reached just before the collapse of late May.

Strong third quarter results from Terex and Manitowoc were the key drivers for the gain. These saw Manitowoc’s shares put on a massive 20.97% between weeks 42 and 47, with Terex also performing well with an 11.78% rise.

The European manufacturers also had a good month, but these gains were somewhat offset by Japan’s crane manufacturers. Tadano’s shares finished in positive territory, but Hitachi and Kobe Steel lost ground.

All the same, the IC Share Index gained 7.11% over the five weeks, taking it to its new high. This gain was head and shoulders above the performance of the mainstream indicators. While the Dow put on 1.35% – and also hit a record high of 12,409 points on 21 November – the FTSE 100 and Topix 500 lost ground. In the case of the Japanese Index, it was a serious slump, with 7.51% being knocked off share prices between weeks 42 and 47.

Taking a longer perspective illustrates the continuing strength of the crane building sector. IC’s Share Index has risen more than 62% in the last 12 months. The same period has seen the Dow and FTSE put on 12.5% and 11% respectively – still good gains, but their performance obviously cannot compare to the lifting sector.

In contrast, the Topix is almost flat for the last year. It put on a good rally in late 2005, but has run out of steam since.

Dollar slump

Having held fairly steady for the last six months, the US Dollar took something of a dive in November. Between weeks 42 and 47 it lost 2.84% to the Yen, 0.36% to the Euro and 3.13% to the Pound. Although these losses sound small, the Dollar is now at its lowest against the Euro this year. What’s more, at almost two Dollars to one Pound, it is at its lowest to the UK currency since 1991.

This sharp drop could well cause concern to those outside the US looking to export to the world’s largest economy. With residential construction declining in the US the economy will slow next year, and an interest rate cut could even be on the cards by the end of 2007. In contrast, the European and Japanese economies should strengthen over the next 12 months, boosting their currencies further against the Dollar.

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