Blame for share slide

Press, Volume CXIV, Issue 33577, 4 July 1974, Page 16

Blame for share slide

Government controls on business were partly to blame for the fall in prices on the share market, Mr J. M. T. Greene told the council of the Canterbury Chamber of Commerce last evening.

Mr Greene, a representative of the Christchurch Stock Exchange, said that the controls, and “the general irhpression that it is no longer decent in our society to be successful and make profits” shared the blame for the fall. However, the market had plenty to offer, and the prognosis was favourable: prospects for investment in late 1974 and in 1975 were good, said Mr Greene in a special report. OIL CRISIS He attributed the sharemarket price fall to high interest rates, the oil crisis, the fall in overseas reserves and prices, and the recent wage order. “To this could be added the concern felt by the market about the restrictions foreshadowed by the Commerce Bill and the profitcontrol methods adopted by the Government in an effort to control prices.”

Apart from the many frustrating sections of the Commerce Bill directed at profits, the Stock Exchange had expressed grave concern about the section on monopolies and take-overs, Mr Greene said.

“The fragmentation of industry in New Zealand would seem to indicate that a certain measure of rationalisation' should be welcomed.”

The sharemarket could i drift further in the short • term, but there was no doubt that there was a lot of 1 money waiting to come into the market, and the present; small turnovers indicated' that heavy selling had' stopped. The market had always recovered to a point higher than any previous high point, said Mr Greene. The Government was committed to full employment, and hence keeping industry

libusy and profitable; the hou<tjing policy would make this t'sector of the industry’ prosf per for some time to come; > and some of the large sums tjcollected by the Superannualition Bill's scheme would be 11 directed to the market. I Provided the world scene •! did not deteriorate, prospects r'were good. ,! Mr Greene also said that ithere was a possibility New ■ Zealand might devalue its . currency in the next few ’ Imonths.