ABSTRACT
The attempt to forecast share prices is the most demanding and exciting of all forecasting exercises. The task falls into three parts. First, it is necessary to forecast movements in the market as a whole. Then an attempt must be made to identify and predict the cyclical excesses of the market. Finally, forecasts of particular share prices have to be constructed in the context of the overall market movements.
The movements in the international and domestic markets are, of course, beyond the control of the firm. A company, however, can influence its own share price. In a sense the management is always striving to do that so as to raise the share price, and it is hoped, to outperform the market.
