Market stands help keep up share prices

Press, 10 August 1985, Page 22

Market stands help keep up share prices

Situation issues, such as Wilson and Horton, Crown Corporation, and Cable Price Downer, continued to underpin the New Zealand sharemarket this week, said Mr Michael Jull, the market operator for Schnauer Shore and Company, Auckland.

The stands in the market for the issues meant that investors were flush with cash and were prepared to come back into the market for blue-chip issues such as Brierley Investments and Fletcher Challenge. In addition, there had been large buying orders during the week for Farmers’ Trading Company, Fletcher, and Winstone, plus continuing interest in Carter Holt, he said. The buying of Wilson and Horton shares held a lot of interest yesterday, with the two broking houses concerned, Buttle Wilson and Company, and O’Connor Grieve and Company, playing a cat and mouse game. Mr Jull said he had not heard anything substantial about what was behind the buying of Wilson and Horton shares, although three contenders had been named by the “New Zealand Herald” — Mr Rupert Murdoch, Dominion Breweries, and Robt Jones Investments.

Mr Tony Norbert-Munns, the operating partner for Egden Wignall and Company, Christchurch, said that the sharemarket was clearly moving into a preBudget and tax-take period. Turnovers were dropping and would have been considerably lower this week if it had not been for the stand in the market for 20 per cent of Crown Corporation at 200 c. The New Zealand dollar remained firm, thus retaining market confidence, interest rates dropped slightly at the close of the week, but liquidity would tighten towards the end of this month. “The outlook for the market, in the short-term, is mixed, and it will probably move lower over the next two weeks,” Mr NorbertMunns said.

Mr Brian Kreft, a partner in Forsyth Barr and Company, Dunedin, said that the predicted advance in equity prices continued until the afternoon call on Thursday

when the inevitable technical correction started and continued through until the close of trading yesterday. “Technical analysis indicates it would be preferable for the market to go through another consolidation period. Such a consolidation would reduce the vulnerability and volatility of the market to a ‘shake-out’ before the August 20 Budget.” Until there were clearer indications available on what the Budget contained, it was difficult to predict beyond August 20. Once again the market leaders such as Brierley, Fletcher, Progressive, and Goodman, were in the forefront of trading, but profittaking occurred in Fletcher and NZI.

The. events which occurred at Hellaby’s special meeting this week highlighted the lack of understanding that the average investor had on the reconstruction of the meat industry. One of the catalysts to this reconstruction has been the Dunedin-based investment company, Apex Group. Chartist analyses have indicated only buy signals for this stock which has, to date, shown little or no weakness technically, therefore, the down-side risk on this market would be minimal.”

The apparent consolidation hopefully would continue through to the middle of next week when prices should again advance, Mr Kreft said.