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Outlook: Wonder of the Goldman ramp

Monday 29 June 1998 23:02 BST
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UNILEVER and its new chairman, Niall Fitzgerald, have done much to justify the near-doubling of the company's share price over the last 18 months, but the hand of god - or Goldman Sachs, as it is known in financial markets - also seems to have played a not unimportant part.

The real outperformance in Unilever's share price came after the company was included as a founding stock on the investment bank's "Global Priority List", Goldman's "best of the best" investment buys. Regardless of the underlying fundamentals, the effect is to give companies unrivalled international investment exposure.

Unfortunately, this is a bit of a double-edged sword. Unilever was summarily removed from the elevator yesterday with the effect that the shares immediately fell 3 per cent. What did Mr Fitzgerald do wrong? Nothing really, apart from the fact that Goldman seems to think it has already ramped the shares far enough.

Yes, ramped, because this is the effect of being on the list. That a share price is going to rise strongly once added to Goldman's Global Priority List is a self-fulfilling prophecy, just as it is going to be damaged once it is removed. What a racket.

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