The Bank Credit Analyst valuation indicator, shown in the graph, is particularly worrying, but the BCA "fair value" indicator, shown below it, is also well out of line. Put at its lowest, there is a serious possibility that Wall Street will fall sharply before the year is out. The tremors of recent trading will then be seen as early warning of the main shock to come. Never the less, the expectation is so general that it really does deserve to be taken seriously. The valuation of Wall Street on most measures is at the extreme top end of the scale. Profits of around pounds 17.5m would put the shares on a forward multiple of just 9.

Sentiment will not be improved by talk yesterday of another paper- funded acquisition, possibly in the US High enough.. It is not a bad rule of thumb that, when experts agree, one should expect the reverse to happen. But a rising tax charge will slow earnings growth in 1996/97. But this year looks like being another year of consolidation.Kenwood is developing new products which should help counter pressure on pricing, while it is moving some manufacturing to a low cost factory in China. Meanwhile, the UK remained difficult for much of the year, although there were signs of improvement nearer the end of the period.One bright spot was the Mizushi start-up Italian air-conditioning operation, which had a storming first year that may eventually help offset some of the difficulties at Ariete.

But Kenwood's fall from grace mainly stemmed from the rights funded acquisition of Ariete, an Italian appliance maker, in November 1994. Yesterday's results for the year to 4 April, showing pre-tax profits up by 16 per cent to pounds 15.6m, suggests that at least some of the market's doubts were well founded. Kenwood Appliances, whose former chief executive Tim Parker left last year to run C & J Clark, remains a name to conjure with in the field of kitchen appliances Sadly, the brand has lost its tarnish with the stock market. Floated at 285p four years ago, the shares have spent most of the past 18 months below their issue price and today languish at 210p, up 1p yesterday. The company has been squeezed by sluggish consumer spending, high raw material prices and competition from the Far East. His appetite for expanding into higher- margin plastic and speciality materials businesses remains, despite Bonar's failure to buy Rotonics, a US plastic mouldings supplier, for $31m earlier this year. The deal would have doubled US earnings, but fell through when Rotonics claimed to have found a third party willing to pay more. Mr Heilig has yet to establish who the mystery bidder was and lawyers are on the case.Francesca Raleigh at broker Panmure Gordon sticks with her full-year forecast of pounds 57m, implying a sub-market multiple of 13, with the shares down 3p at 529p A core holding in the sector..