45% plummet, page-25

Can you believe the ceo was quoted only last week saying he thinks the shares at 82c were a good buy. 2 to 3 year turnaround he reckons. Any keen to guess the share price in 2 to 3 years time.




FALLING demand for management investment scheme (MIS) forestry projects is believed to have triggered Friday's trading halt in Elders shares.
The rural services and automotive parts group has been hit by a Rural Bank decision to refuse finance to investors wanting to buy into its 2010 forestry venture.

The bank's decision 10 days ago topped off a general downturn in MIS activity this tax season, with high-income professionals and self-employed tradespeople seeking investment alternatives before the June 30 cut-off.

Elders asked before stock market trading yesterday for its shares to be suspended until Tuesday, when chief executive Malcolm Jackman will host a conference at 8.30am to update investors on trading and operational issues.

Mr Jackman abided by stock exchange rules and declined to respond to questions.

However, two brokers called by BusinessDaily said they were not expecting any surprise announcement, other than a better picture of how the 2010 forestry project has sold.

Elders, like other promoters of managed investment schemes, has had to overcome investor concerns about the future value of MIS ventures after the collapse last year of industry giants Great Southern and Timbercorp.

Elders shares ranged between 82 and 84 this week, having dropped 47 per cent since the company completed a major recapitalisation last year.

Last week the share price slumped 15 to 80 as nervous shareholders responded to news that Elders' 2010 forestry MIS scheme was struggling to get investors to commit.

Market analysts also are worried Elders has been overly optimistic about revenues likely to be generated by its farm merchandise and by its financial services division.

While recent rain lifted crop expectations and helped loosen farmers' pockets, the break arrived late in WA and SA and the short planting season restricted sales of crop chemicals and fertilisers.

Earlier this week Mr Jackman said major shareholders were perplexed by the falling price of Elders shares.

"We've taken a bit of a battering, but that's life as a public company, and I think most people are now looking at the share price and viewing it as a pretty good buy," he said.

"Elders is going to be a two or three-year story, not the two or three-month turnaround that some people in the share market might like."