Commercial Market at high level

Press, 4 February 1980, Page 8

Commercial Market at high level

By

ADRIAN BROKKING,

commercial editor

The New Zealand sharemarket closed on Friday at 374.53 points on the N.Z.U. index — its highest level since September 5, 1973. In [fact, except for a heady period of less than three months, from June 14 to September 5 of that year when the market rapidly climbed to a peak of 405 and then began to fall just as rapidly, the market has never been higher. Trading was quite active; generally, the market is performing much' better than predicted.

However, it is difficult to see this firm tone continuing for long, for the “fundamental” reasons of high interest rates and a retreating economy, and the “technical” reasons of the approaching round of new floats and cash issues, and the March tax payments. Speaking of new issues, the most interesting float on the New Zealand market for many a year is the public issue by ANZ Banking Group N.Z.) Ltd, of 6,674,500 shares at 175 c a share.

This' float is bound to be a' huge success. At present in-i vestors interested-in banking: can only invest in overseas shares, and many New Zealand investors have been, holding overseas , banking shares for many years. . Moreover, the premium of only 75c makes the shares look decidedly cheap: at the proposed 14 per cent dividend they would yield 8 per cent. I would think that this issue will be heavily oversubscribed.

: Unfortunately, details of the float were accidentally released in Christchurch 24 hours before the prospectus was registered, because of too-quick work by a firm of couriers.

The couriers, delivered boxes of prospectus around Christchurch — causing pandemonium in Wellington where orders at one stage were issued to try and reel-, aim the booklets.

The managing director of Independent . Newspapers, Ltd (Mr J. A. Burnet) said on Friday that his company accepted full responsibility

for the premature-rebase of the prospectus. He said that his company received printint instructions from and acted for the managers to.- the offer. .Regrettably the couriers* for INL Print, Ltd, failed to carry out their written instructions.

Mr Burnet said he wished to apologise to the directors and management of the ANZ Banking Group (New Zealand) Ltd, and to make it clear that in no way could they have taken any further action to avoid this regrettable happening.

The NZ announcement included its intention t make a bid for those shares in U.D.C. Group Holdings it does not already,own. When U.D.C. in answer to the query by the stock exchange said that it had not received such an offer, the exchange quite, qorrec.tly suspended frading'imU.D.C./shares. However, the suspension was lifted-, on Friday as all the necessary procedures have now been complied with.