THE MARKET Confidence boost from FCL result

Press, 11 September 1986, Page 24

THE MARKET Confidence boost from FCL result

Brierley Investments and Fletcher Challenge, the two heavyweights who together account for about one third of the movements in Barclays’ index of industrial shares, boosted it no less than 43.22 points higher to another record high of 3094.59. Brierleys put on 20c to 732 in what is now becoming a tradition — the runup before the profit announcement in anticipation of the “goodies,” the bonus and profitable rights issues. Brierleys’ Hong Kong offshoot, lEP, lost 5c to $11.95, and Tozer KM was unchanged. Fletcher jumped 24c to 450, in response to an excellent profit result — 33 per cent up to $241 million, with wonderful cashflow to boot. The result was certainly better than expected, and with a positive return from Tasman Pulp and Paper might have been close to $3OO million. For the first time in days rises outnumbered falls (about three to two) as industrials, especially exporters, improved on the back of a weaker New Zealand dollar. On the Reserve Bank trade-

weighted index, at 57.8, our dollar must be close to the level where the balance of payments will right itself very quickly. Trading was about as active as on Tuesday, with 7.8 million shares changing hands fo $19.8 million — an average of 253 c a share. With the exception of Mair and NZI Corp, the top ten volume leaders were “go-go” stocks. “The market continues to ignore the fundamentals of industrial disputes, wage increases, appointment of receivers to many companies, inflation reappearing in the United States and United Kingdom, local interest rates still high by world standards and company reports showing a definite slowdown in the last six months,” said Mr Tony Norbert-Munns, operating partner in the Christchurch sharebroking firm Egden Wignall and Company. With many experts talking this market down, the market continues to say that everyone is wrong, and in quality top line Issues with strong overseas earnings and solid overseas buyers

wanting more stock, this market in the short term is not likely to come down. The only reason for a sharp drop would be politically motivated, and the nearer to the end of the year we get, the less chance of this happening, Mr Norbert-Munns said. Ceramco is continuing its spectacular recent spurt, and jumped a further 40c to $10.20. Westbridge rallied with a 30c burst to 180, and 10c rises were chalked up, inter alia, by Fisher and Paykel at 460, Jarden at 260, Leyland Investments at 325, Rainbow at 700, and Apex at 385. The biggest falls were chalked up by Transpac, down 80c to 200, and Trans Ashburton, which dropped a further 40c to 120. Robert Jones Investments lost 10c to 560, Renouf Corporation another 5c to 650.