Share Market Wrap 20 Oct 06

This week the government finally approved the new cross media ownership laws. The Packer’s and Murdock’s have been pushing for this to occur for years, so it is no wonder they made the first strike in the moving Australia’s media assets around. But are the new laws really good for the country? This depends on your point of view. As an investor, I think its great news as it will allow these companies to expand, which therefore means there is strong potential for growth in the share price. That said it is also important to consider the social impact that these changes will have, given that the media in Australia will now be controlled by fewer companies, which could lead to media bias.

So what is happening on the market this week?

Last week I indicated that the All Ordinaries Index would most likely peak between 5260 and 5275 points around the 15^th to 20^th of October. On Tuesday, the 17^th of October, the market rose slightly above my target price achieving 5298.90, before falling away to create a peak. While I cannot confirm, at this point, that this is the peak I have been expecting, I believe the probability of this being correct is quite high. Therefore we could reasonably expect the Australian market to fall away for at least the next two to four weeks into a low with price falling to between 5155 pts and 5012 pts around the 15^th to 22^nd of November.