Market at new peak
by
ADRIAN BROKKING,
commercial editor
The New Zealand sharemarket made ground on each successive day last week: it passed its previous peak on Tuesday, and reached a new peak of 692.06 on Friday, on substantial volume. Since the beginning of the year market capitalisation has improved 26.5 per cent, a very good performance indeed. The action surrounding, Henderson and Pollard provided the major stimulus, but good profit reports added impetus. Major companies with good results included Ballins, TNL, Odlins and Carter Holt.
Ballins made an outstanding recovery — as predicted by the directors in the halfyearly report. The directors are to be congratulated on two further counts. First, for providing such an informative preliminary report, which was especially welcome after the many rumours about the company this year. Second, for keeping the result so tightly under wraps until the formal announcement. There was absolutely no sign of “insider trading’’ before the result was made public — quite a feat in view of the outstanding recovery,
and unfortunately not too common in today’s market. The Ballins shares quickly put on 17c, to close the week at 128 c. TNL shares reacted to the result by closing on Friday at 122 c, for a rise of 11c on the week. Carter Holt shares greeted the profit announcement of their company with a rise of 35c to a new high of 480 c. OdlinS gained 14c to 108 c. With, the exception of N.Z. Forest Products, most timber shares rose in sympathy: Canterbury Timber Products 20c to 400 c, and
Fletcher 7c to 288 c, stood
out. Others to react favourably to news reports were Alex Harvey, 28c to 300 c, CBA Finance, 28c to 328 c, Fisher and Paykel, 10c to 272 c, Lusteroid, 50c to 265 c, Progressive, 25c to 490 c, Rex Consolidated, 15c to 320 c, and Vacation Hotels, 17c to 97c. The largest fall was by Canterbury Frozen Meat, which lost 15c to 345 c. The directors have a difficult proxy fight on their hands: as the Primary Producers Cooperative Society has some 40 per cent,of the shares, the CFM directors obviously need every proxy for the remainder.
Naturally, both groups are canvassing with “grievous application and consuming fire” if I may be permitted to quote poetry in connection with so serious a matter. Both concentrate their arguments on the question of contrbl.
CFM rightly points out that PPCS already has virtual control, and that it would like the PPCS holding reduced to a more comfortable level. PPCS, in their latest communication with CFM shareholders, makes much of the allegation that the CFM directors are ready to pass control of their company to Fletcher Challenge.
At the same time the PPCS directors say that they do not seek control of CFM. I find it hard to believe either statement: that CFM directors want to pass control to Fletcher Challenge, or that PPCS does not want control of CFM itself. Apart from the fact that increasing its shareholding from 24 to 40 per cent of itself seems to negate its contention that it does not want control, PPCS would not get so upset over the 10 per cent Fletcher Challenge holding if it did not see it as a threat to its ambitions.
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Bibliographic details
Press, 2 June 1981, Page 22
Word Count
546Market at new peak Press, 2 June 1981, Page 22
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