Buyers arbitrage

Press, 13 July 1985, Page 22

Buyers arbitrage

Some investors are beginning to arbitrage between the New Zealand and Australian sharemarkets in issues such as Fletcher Challenge and NZI Corporation, says Mr lan Waddell, the investment analyst for Mouat Bolland and Company, the Wellington broker. Mr Waddell says he has noted some delay in issues such as NZI Corporation and Fletcher Challenge, which are listed in both countries, because of the arbitrage possibilities. The big gains on Thursday afternoon, among three leaders caused some profit-taking in yesterday’s morning call, but once trading began in Australia, activity picked up. NZI Corporation again led the market with Brierley and Mr Larry Adler’s FAI Insurance (from Australia) being the

likely buyers. Buttle Wilson and Company, of Auckland, were again the big buyers in NZI Corporation yesterday, and market attention also focused on a special sale of 660,000 NZI options at 125 c. Overall, trading in the market was strong in the afternoon call although, as is traditional on a Friday afternoon, there was not much volume, he says. Mr Humphrey Sherratt, the market operator for Anderson Reid and Company, the Christchurch broker, says the sharemarket closed on a strong note yesterday, after the spectacular gains made on Thursday afternoon by Brierley, Fletcher Challenge, and NZI Corporation. The market opened the week on a firm note as Jarden and Company continued to fulfil the order for 10 per cent of Lion Breweries’ shares at 370 c each on behalf of Tarragon Investments. Additional corporate activity boosted the market with stands in the market for Kiwifruit Industries’ shares (sought by Chase Corporation) and Henry Berry (by Taylors Group), he says. This corporate activity, along with the reinvestment of the proceeds of Lion sales, continued to fuel the market. As expected, profit-takers entered the market in the middle of the week to take advantage of the big gains made in the previous seven trading days. This change appears to be nothing more than a technical correction to a bullish market, Mr Sherratt says. However, one market leader which failed to ease was NZI Corporation, as it was sought throughout the week. NZI, along with Fletcher and Brierley, made big gains on what appeared to be strong overseas buying interest, particularly from Australia.