Market recovers
The New Zealand sharemarket took new heart from the Government report “Growth opportunities in New Zealand,” which was published on Wednesday. The market file on the first two days of the week, but picked up on Wednesday, and closed strongly, •at 370.62 on the N.Z. U. Index — about the level of a fortnight ago. ' . Investors’ sentiment is engaged in a tug-of-war between the long-term prospects for the country — which are undoubtedly excellent — and the short-term problems facing the economy. At present obviously the long-term prospects are winning. However, there is nothing new in this — about a year ago I wrote on this page that the economic future of our country is very bright.
Our- energy prospects, the great possibilities for fishing, forestry, horticulture, tourism, as well as the scope for extension of traditional agricultural exports — and the processing possibilities thereof — entitle one to think that in fewer than 10 years New Zealand ought to be doing really well. jrfThe rub,. of course, is making sure that it will happen,; because it will not just of-itself. A great deal has to be done to restructure the economy, to improve the infra-structure, to change our institutions and attitudes in order to increase; efficiency and productivity. Looking at the short term one would have to say that we are not getting on with it as well as. we could, and the sharemarket showed signs of being sensitive to these negative factors.
The threat of recession, galloping rates of inflation with the resulting high interest rates, high oil prices, tightening liquidity, and the drain on the market of tax payments and new issues, are all showing their effect. Share prices in New Zealand were mixed and lacked direction, except for the understandable interest in Australian shares. Meanwhile, company reports were good. The result from Dalgety again- . confirms the expectations held for the rural sector, and the results from Cyclone and Rothmans were also encouraging. N.Z. Farmers’ Fertilizer disappointed a little; this company suffered from the reduction in the fertiliser subsidy, and; also lost on foreign exchange.
Market recovers
Press, 18 February 1980, Page 20
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