‘Blood-bath’ on market

Press, 17 January 1986, Page 8

‘Blood-bath’ on market

The New Zealand sharemarket was described as a blood-bath by an Auckland broker yesterday as the Barclays industrial index plunged 50.16 points — its biggest fall since the indicator was established in 1957. The index dropped to 1882.99 and falls outnumbered rises more than three to one in busy trading. Higher interest rates and profit-takers combined were two of the main causes. The movement in the Barclays index, based on 40 leading listed companies, represented a 2.59 per cent fall.

Mr Derek Howarth, the market operator for Lawrence, Millton, and' Howarth, the Christchurch broker, said that one broker ‘ had described the morning call at the Auckland exchange as “a blood-bath.” The market fell sharply in early trading, but steadied in the afternoon call on a reduced turnover because of the wide gap between buyers and sellers. The reason for the quieter period was because traders had to go back to their clients for instructions. There was no way that there could be sellers in NZI Corporation at 175 c when the issue had dropped to 165 c for example, he said.

Brierley, which is estimated to make up about 15 per cent of the market’s capitalisation and about 20 per cent of the top 40 companies, slumped 38c to a low on the day of 700 c after selling as high as 740. Other leading issues to fall sharply included Chase down 35c to 560, Equitlcorp 15c to 415, FTC 13c to 140, Fletcher Challenge 15c to 308, and NZI Corporation 10c to 165. I Against the trend was Carter Holt, op 2c to 312 c on a turnover of more than 800,000 shares. Goodman wsa steady at 370 c, and Crown firmed lc to 172 c. Slightly weaker were Apex, NZ Forest Products, and Wattie but Dominion Breweries gained 3c to 305. New Zealand Salmon lost 20c to 710, having gained 150 c so far this year, and New Zealand Marine Farms eased again. James Smith, the Wellington retailer, firmed sc. A late special sale of 1.3 M Endeavour shares at 170 c drew comment because it was below the offer of both Omnicorp and Young Nick Holdings. Endeavour gained 2c to 183 in ordinary trading on a turnover of 365,400 at that price. Gold issues failed to react to the jump in bullion prices on overseas commodity markets. Goliath lost 3c to 13 and L and M 5c to 65. New Zealand Goldfields was untraded. Correction: The price of the Dingwall and Paulger shares bought by Egden Wignall and Company, on Wednesday was 315 c, not 185 c as reported in this column yesterday.