NZ sharemarket last year best out of six

Press, 15 April 1986, Page 30

NZ sharemarket last year best out of six

By

SIMON LOUISSON,

in Wellington

The Investment Yearbook of the Wellington broker, Jarden and Company, shows that the New Zealand sharemarket was the best market out of six to invest in, for the year to March 31, 1986. In that period the Barclays Industrial index rose 56.9 per cent This compares with the London "Financial Times” index which was up 41 per cent, the Dow Jones Industrial index, up 39.5 per cent the Australian all-ordin-aries index, up 32.3 per cent the Nikkei Dow Industrial Average (Japan), up 19 per cent, and the Hang Seng index (Hong Kong), up 15 per cent When the foreign investment regulations were

removed at the start of 1985 investors were warned by some analysts that they would be increasing their risk through the exchange risk, by investing offshore.

This is borne out by the Jardens yearbook which calculates the foreign indices on an exchange-

adjusted basis. The average returns for the various indices can be markedly altered when so adjusted.

For example, the 15 per cent Hong Kong return is turned into a 0.7 per cent loss.

On the other hand, the devaluation of the Kiwi dollar against the yen improved the Nikkei Dow

return from 19 per cent to 44 per cent, and in sterling the FT index gain of 41 per cent is increased to 47 per cent The drop of the Australian dollar against the Kiwi halved the all-ordin-

aries return from 32.3 per cent to 16.4 per cent Similarly the Kiwi strength against the

American dollar diminished the return of the Dow Jones from 39.5 per cent to 20.9 per cent. The Jardens Investment

Yearbook also gives an analysis of New Zealand companies performance by market capitalisation,

and gross returns. On capitalisation Brierley Investments is No. 1 at $3313.7 million, now well

ahead of Fletcher Challenge on $1749.4 million. Best company return was Pacer Pacific Corporation with 703.46 per cent, followed by Rainbow (427 per cent), Chase Corporation (305 per cent), Renouf Corporation (297 per cent), and R. & W. Hellaby (283 per cent).

Bottom of the batting averages was Andas Corporation giving a minus 71 per cent return, followed by Autocrat Sanyo (minus 70 per cent), Investment Finance (minus 55 per cent), and New Zealand Steel (minus 49 per centl