From the Herald:Perpetual shares cop an extra beating * Danny...

From the Herald:

Perpetual shares cop an extra beating

* Danny John
* June 24, 2008
*

THE worst performance by the ASX All Ordinaries in 26 years is taking its toll on the share price of one of the best known and largest fund managers, Perpetual Limited.

The stock took a near-10 per cent battering yesterday as it gave up a whopping $4.75, with market watchers expressing bafflement about the reasons behind the sudden decline.

Closing at $43.25, Perpetual ended the day at a four-year low with the drop in value even more pronounced given the relative low volume of shares traded - 293,738 - of the 42 million quoted. However, that was more than double the average daily number.

The recent performance of Perpetual's shares has largely mirrored that of the overall equities sector in which it is a major investor, with its shares having been on the slide since the beginning of the year.

The decline is even more dramatic when compared to last November, the point just before the market's two main indices went into their most significant decline since 1982.

Eight months ago Perpetual was trading at the dizzy heights of $79, a record high. But it has now lost 45 per cent of that value in its $36 fall from grace.

According to Goldman Sachs JBWere, the All Ords index is off 15 per cent in the financial year so far - nearly half of that accounted for by the last 15 trading days.

June has traditionally been a bad month when the market has turned down but there has been a particularly severe fall this year, the market commentator says.

Perpetual's investors appeared to be responding to a move by the broker Morgan Stanley which last week cut its recommendation on the stock to a "sell" after raising the risk of a fall in the company's earnings for the coming financial year. The broker also reduced its target price for the shares from $54.61 to $41.92.