Weak Aust, market

Press, 23 November 1981, Page 24

Weak Aust, market

The Australian sharemarket drifted for most of last week, but dropped sharply on the last two trading days as major resource stocks retreated under selling pressure. Leading mining and oil stocks sank to their lowest prices for the year, and the index of all-metal-and mineral stocks lost 22.3 points to 404.5, its lowest level in two years., The oil-and-gas index fell 33.7 points to 558.1 for the week. Industrial issues showed more stability, and prevented a severe market downturn; situation stocks helped restore investor interest- in the market. The all-ordinaries index finished the week 10.9 points down at 559.5

Falling metal prices and the gradual slide on Wall Street, where fears of a United States recession overcame the benefits of lower interest rates, have kept Austalia’s big explorers and resource developers under pressure, Ashton Mining slid 30c to a 1981 low of 130 c after declaring a SI6M rights issue to raise capital for work on the Argyle Diamond Deposit in Western Australia

The big sugar, energy, and minerals groups. CSR, suffered the worst slump of the week after announcing a SI3SM rights issue and a 30 per cent drop in interim profit to $42.5M.

The stock finished the week 61c down at 353 c, its cheapest price in more than

two years.

The release of the Campbell report on Australia's financial system, which recommended entry of foreign banks, deregulation of interest rates, and tax reforms on shareholder dividends, had little impact on the market.

Most traders and political observers said they did not think the Federal government would introduce most of the controversial business suggestions.

The ANZ -Bank's announcement ol a record SI7SM annual profit, and a one-for-five bonus issue received a frosty market reception, but the bank had lost only 4c to 560 c by the end of the week. The Bank of NSW firmed 2c on Friday to 300 c for a week’s gain of 10c after a 33 per cent increase in yearly profit to SI6SM, and an increased dividend.

Brokers said bargain-hunt-ing may improve the market slightly this week, but the bearish mood on Wall Street, and predictions of further tough times for metal stocks would block any chance of a sustained recovery.