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SAN DIEGO MARKET WATCH

January 26, 1988

If the technicians are correct, the country is in a bear market, according to Irving Katz, director of research for Thomas Green/San Diego Securities.

"If that's the case, then Monday's rally in which the Dow rose 42.94 points was only a rally in a bear market," Katz observed.

Interest-sensitive stocks finally came out of hibernation with San Diego Gas & Electric leading the way, Katz said. The utility stock was up $1.25 for the week and, at its current price of $32.25, offers a 7.7% annual yield.

The savings and loans joined in the rally with Imperial Corp. of America up $.625; Home Federal Savings & Loan, up $.50, and Great American Savings & Loan up $.25.

Imperial Corp. of America yesterday reported earnings of $.93 for the quarter and $3.46 for the year. At its current price of $9.375, the stock is selling at less than three times 1987 earnings and half of its $18.57 book value.

Home Federal and Great American are also selling at less than half of their respective book values, and at historically low price/earnings ratios, Katz said.

Energy Factors was up $.50 to $6.75, where it is selling at a premium to Sithe Energies' $6.50 per share tender offer. "The market is telling us that either the bid will be raised, or it will not be successful," Katz said. "Shareholders usually do not tender at a price lower than the market. And, the offer was certainly a disappointment to shareholders who earlier had been offered more than twice that amount."

Energy Factors' book value on Sept. 30, 1987, was $8.82, Katz said.

Western Health Plans was up $.875 per share to $3 on unconfirmed rumors of its possible acquisition by Aetna Insurance.

Southwest Bank gained $.25 to $3, despite reporting a loss for 1987. The stock continues to be acquired by insiders, according to Katz.

Henley Group fell $.50 to $19 despite Michael Dingman's threat to start a proxy fight at Santa Fe Southern Pacific.

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