THE end of the calendar year provides an opportunity for reflection.

Within the world of stock markets, a review of 2001 is likely to prove more interesting than rewarding.

The dominant theme throughout the year has been the unwinding of the market excesses that had built up during the late 1990s and culminated in the millennium.

The FTSE peaked in December 1999 at 6950, a figure that looks a little incredible in these more sober times.

Today's value of 5230 represents a fall of 25 per cent from the peak and as this is the year-end review, the market looks set to produce a decline of 15 per cent over the full year.

The full extent of the market's unwinding has been clearly felt in the connected sectors of telecoms and technology.

The dawn of the 21st Century was to bring a new technical revolution enhancing our ability to communicate and transact more effectively.

Companies old and new expanded rapidly to meet the expected demand though once the party music stopped, there were a few too many partners on the dance floor.

Whilst new technology is not going to go away, 2001 has seen a more realistic appraisal of our appetite for products and services and equally the ability of companies to profit from exploiting the opportunities.

The rebalancing of supply and demand includes the pain of companies going bust and leaving the market place, whilst others will begin to merge, eliminating competition to survive.

Over the coming couple of weeks I will take a look at those companies that looked interesting at the beginning of the year and provide one or two pointers for next.

John Pearson - divisional director

* Gerrard is regulated by the Financial Services Authority. Share prices and the income from them can go down as well as up. Readers are advised to seek professional investment opinion before entering into dealings in securities mentioned in this article, which may be unsuitable in their personal circumstances.