Brokers see further rise

Press, 19 April 1986, Page 22

Brokers see further rise

The market ended with frantic trading as Brierley traded as high as $5.60, Mr Stuart Foster, research manager for Lawrence Milton and Howarth, Christchurch sharebroker, said. The highlight of the week was the run in NZl’s price, and volume traded. Rumours exist as to who the buyer is and Renouf Corp and BIL were two names mentioned.

The buying interest was both from local and overseas investors, especially Australians re-invest-ing proceeds from corporate activity such as BHP and Elders share dealings.

The week included the listing of three new companies. Saudicorp ended the week at 310 c which gave those lucky enough to receive shares, a good premium. The placement was made at $2.10. The shares look likely to run upwards once the stags stop selling. Other new listings were The Terrace Project and Cashmere Pacific.

Mr Brian Kreft, of the Dunedin sharebroking firm Forsyth Barr and Company, z said that the result of the Government stock tender was a further positive signal in relation to future equity price performances. “The market and financial analysts have been awaiting a positive signal on lower interest rates for some time,” he said, “and this, together with other factors, for example the statement by the internationally renowned merchant banker, Morgan Grenfell, that interest rates in New Zealand appear to be off the peak, will tend to underpin the new level of equity prices.

The market continued to be extremely active with interest centering around Brierley, NZI, and Fletchers. Institutions as well as small investors have been in the market, and it appears that this high level of activity will continue on into the coming week.

The two-tier structure of the market is now very clear and there are stocks that have been ca-

tegorised into the second tier which warrant attention. Post-split, New Zealand Salmon continue to advance and are now in excess of 500 c with volume being traded at that.

The stags have had a field day with Saudi NZ Capital Corporation who, at the time of placement, correctly priced the shares at $2.10. However the lead time to listing

saw a substantial increase in the market indices and this together with the movement in Wilson Neil and Thoroughbred Holdings, in which Saudi has substantial stakes resulted in the stock hitting the market at $3.00. Those investors wishing to take a position in this stock should do so now and take advantage of the selling pressure emanating from the stags.

“Two other stocks receiving attention are Omnicorp and Thoroughbred. Chase Corporation having increased their holding in Omnicorp, and the market is expecting a lead to this Company’s future direction. This should be evident when the Company announces its profit in mid May.

“Thoroughbred, another stock with a Chase connection, appears to be gaining ground and has likely further upside potential. It is interesting to note that in a recent bloodstock analysis carried out by a Wellington Broker, O’Connor Grieve, this company and Blandford Lodge received the highest ratings,” Mr Kreft said.