Brokers see easier trend but no panic

Press, 12 October 1985, Page 22

Brokers see easier trend but no panic

The New Zealand sharemarket was definitely firmer in the afternoon, after being mixed in the morning, said Mr David Dott, of the Christchurch sharebroking firm Chamberlain Sturge and Company. "It is the old and familiar story,” he said. “Prices go down, and bargain hunters move in as sellers immediately withdraw and scrip again is hard to get. “The immediate outlook for the market is sideways to down. It is hard to see it go up in the present mood of the wage negotiations,” Mr Dott said. Mr Brian Kreft, of Forsyth Barr and Company, Dunedin sharebroker, said: "Our last week’s expressed expectation that the market would have a readjustment of up to 30 points measured against the Barclay’s index was somewhat optimistic, with the market recovering only 13 points after a rapid decline. “The speed and the extent of downward movements in share prices in the last 10 days has done substantial technical damage to the . market in the short term I and without doubt caught some pundits off guard. “Wednesday’s rally was short-lived and on low volume with a weakening trend becoming evident in Thursday's trading sessions. “The market moved through the 1600 barrier with the same swiftness as

on the way up, and although not wishing to appear too pessimistic, our analysts consider the market is headed for the 1500 barrier which is bound to be a testing and a solid support point.

“Hellabys continued to show volatility, with an apparent base price 216 c, and closed the week up from that level, and the other two stocks I have discussed in recent weeks, namely Wilson Neill and Apparel, con-

tinue to hold in the deteriorating market. "Only the smart traders who are quick on their feet are in the market at the moment, and other investors must remain hesitant about committing additional cash, similar to an old gipsy saying “the man who catches a falling knife only stands to loose his fingers,” Mr Kreft said. Mr M. M. Benjamin, of the Auckland sharebroking firm Morrow and Benjamin, said that the market was all over the place this week. “It is nervous and jittery and goes down, and then buyers come back and push it up again. Bendon is a typical example: it drops for no apparent reason from 260 two weeks ago to 220 on Monday, and yesterday was back at 260 again — without any change in the fundamentals of this well-man-aged company,” he said. “Brierleys behaved like a K, but on the whole was good support for the so-called international stocks. “At the same time exporters to Australia, such as Cavelco, Masport, and Fisher and Paykel, are under pressure because of the strong dollar. Fisher and Paykel’s next profit report is likely to disappoint, as the company has also had production problems. "Some of the recent listings that looked speculative at the time but reached quite high prices are now selling at much more realistic values,” Mr Benjamin said. On the immediate outlook, he said that it would be a funny, nervous market, in which tightly held stocks would fare best. On the other hand, stocks with cash issues might find themselves under strain; Steel and Tube was a good example of this, Mr Benjamin said.