SALOMON <SB> SEES MORE STOCK GAINS WORLDWIDE
Analysts at Salomon Brothers Inc say
the outlook for stock markets worldwide is postivie, although
total returns in the U.S. stock market are not expected to
exceed 10 pct over the next 12 months.
    The report by Robert Salomon Jr and Caroline Davenport said
that after a strong first quarter, which saw U.S. stock market
indices rise more than 20 pct, the direction of the market is
still upward because slower economic growth will stretch out
the recovery period. The firm expects profits for companies in
the Standard and Poor's 500 stock index to rise 17 pct in 1987
and 18 pct in 1988. 
    The bullish global outlook is underpinned by continued but
subdued economic growth, fiscal restraint, good liquidity and
increasing profits, Salomon said.
    The Salomon analysts say potential risks which must be
monitored include any shift toward protectionism and foreign
buying of U.S. stocks particularly by the Japanese. "A sharp
run-up in stock prices in secondary stocks" would be a warning
sign, as would a big increase in enthusiasm for the initial
public offering market," Salomon said.
    Salomon said global diversification of equity markets has
reached a new peak.
 Reuter
