Most brokers remain confident on market outlook

Press, 22 June 1985, Page 23

Most brokers remain confident on market outlook

The New Zealand Sharemarket closed mixed yesterday, said Mr David Dott, of Chamberlain Sturge and Company, Christchurch sharebroker. “However, the market had a slightly better tone in the morning,” he said. “It was noticeable that the shares that held up best yesterday were the ones that were popular with overseas people earlier in the week.

“Investors are becoming more cautious and more selective, and next week the market will probably be much the same. They are still buying, but it is hard to get the ‘good stuff’ in quantity.” The latest “Quarterly Predictions” of the N.Z. Institute of Economic Research are likely to increase the number of pessimists in the market. To get going again the market needs a couple of good takeovers, Mr Dott said.

The market stayed fairly steady this week, an Auckland sharebroker said, propped by strong buying ail week in NZI Corp, and Fletchers, which was listed in Australia and received favourable press comment over there. :

Most events that could affect the market were anticipated. Good company results are still coming in:

Lion Breweries’ profit was up to expectations, and the company was not rerated after its recent strong rise. The drop of around two percentage points in Government stock rates had also already been discounted. The broker said that judging by his books there would be further buying support next week, albeit selectively, and without heavy selling he could not see the market weaken much. After his steady Budget he would expect the market to carry on for a while on a steady note, he said. “The market came off the rise after the Budget perhaps a little earlier than anticipated,” said Mr Brian Kreft, of the Dunedin sharebroking firm Forsyth Barr and Company. “We thought that the forward momentum would continue, albeit at a slower pace. The postponement of GST is a further factor in the market’s favour. “We are looking to another period of consolidation, but all present signs are good for the market provided the Government does not give in to pressure from traditional Labour voters,” he said. “Retail sales are likely to flatten, which must eventually flow onto manufacturing, but we would expect

the market to move ahead until six weeks before the September Budget, and a volatile market in the leadup to it,” Mr Kreft said.