DREXEL TELLS U.S. STOCK BUYERS TO LOOK ABROAD
Drexel Burnham Lambert Inc is telling
clients getting nervous about the volatile U.S. stock market to
take a look at European and other foreign stock markets.
    "We're still pushing for a fully invested position (in U.S.
stocks) but we also recognize the market is up 40 pct since
September," says Burton Siegel, investment strategist.
    Rein van der Does, director of international research,
admits to being cautious and somewhat confused about certain
developments in the Tokyo market, such as Nippon Telephone
shares trading at 250 times earnings.
    The firm recently dropped its recommendation on Jaguar plc
<JAGRY> following a sharp runup in the shares. About the same
time, says analyst Khaled Abdel Majeed, Drexel issued a buy
recommendation on the West german automaker BMW.
    He says a new plant and new models brighten the outlook for
1987 and 1988. "The company trades in Germany on the parent
company's earnings but on worldwide consolidated earnings, the
multiple is seven or eight, half that of competitors."
    By contrast Jaguar's share price to earnings multiple is
about 12 and Daimler-Benz AG is around 14 or 15.
    Drexel analyst Lucille Palermo recently upgraded
recommendations on some Canadian gold stocks. With no recession
in sight she sees improved physical demand plus new buying
interest from the Middle East. Also, expectation of a higher
inflation rate stimulates demand.
    On the supply side she thinks "people are overlooking the
problems in South Africa."  Palermo says all of this will push
the bullion price to 475 dlrs an ounce by the end of the year.
    Her current buy recommendations are Agnico-Eagle Mines Ltd
<AEAGF>, American Barrick Resources Corp <ABX>, and Echo Bay
Mines Ltd <ECO>.
    Palermo also believes the overall Canadian stock market has
greater potential this year than last. Although the Canadian
dollar has moved up slightly it is below levels of several
years ago. "Canadian exports of all types look relatively cheap
to foreigners - resources, manufactured goods, bonds and
stocks."
    Other European stocks favored by Drexel include Club
Mediterranee <CMI>, Pernod-Ricard, Royal Dutch Petroleum <RD>,
Unilever <UN>, British Petroleum Co plc <BP> and Imperial
Chemical Industries plc <ICI>. Drexel cautions U.S. investors
that foreign dividends may be subject to withholding tax.
 Reuter
