THE MARKET Index up 2.2% for week to all-time high

Press, 11 October 1986, Page 23

THE MARKET Index up 2.2% for week to all-time high

By

ADRIAN BROKKING

The New Zealand sharemarket kept to its relentless march this week, with Barclays’ index of industrial shares reaching an all-time high on four of the five trading days. The index closed yesterday 3.28 points up at 3260.55 — extending its gain for the week to 70.30 points. This represents about 2.2 per cent, and since the beginning of this calendar year the index has put on a whopping 71.5 per cent. Total reported turnover for the week was 38.3 million shares — well down on last week’s 45.6 million, confirming the declining turnover trend of the last six weeks. However, this level of activity is still more than three times that of a year ago, and brokers are still very busy. Although 31 shares

reached new highs for the year during the week, the unevenness of the market is shown up by the fact that very many shares are trading well below their highest price. Investment and venture companies, as well as property companies, were well represented among the new highs: Rainbow Corp and Rainbow Properties, Omnicorp, Capital Markets, Industrial Equity Pacific, Crown, Leyland Growth, Pacerpac, Qtron, Robert Jones Investments, Wellesley, Mayfair, and Commercial Securities all featured. But there also was a sprinkling of solid industrial stocks among them, notably Fletcher Challenge, Watties, NZI Corporation, Carter Holt, NZ Cement, National Pacific, BNZ Finance, and Command Services Corporation all caught the eye. The sharemarket boom has created a nightmare with regards to share transfers and settlement of transactions. The best solution ap-

pears to be to do away with share certificates, and this is what the stock exchange has in mind. The exchange hopes to start a new automatic system of transferring shares, if company, exchange and share registries can come to agreement on exactly how the system can be streamlined. The exchange intends to circulate a discussion paper to the Institute of Directors and listed companies and seek their comments. Yesterday the exchange and the major share registries agreed to develop into a detailed plan the exchange’s proposals for introducing scripless share settlements based on fixed settlement dates. At the meeting in Auckland they also agreed to establish an industry group to achieve it. The exchange had also received a sympathetic response from the Government, it said in a statement. Further talks would be

held with the Government, listed companies, directors, and business and investor groups as the project progressed. Although the exchange remains vague on specific details, the president of the exchange, Mr Rex Pearson, said during the week that its attitude had not changed markedly from that he outlined in a speech earlier this year.

On that occasion he referred to an electronic system that would complete settlements within five days of a share transaction being undertaken. The registration process could be carried out either by nominee companies (with ownership changing within the nominees and without the knowledge of the company’s directors and without changing the name of the registered holder) or by share registries on an automated basis except for reporting variations of major holdings to the company’s directors. Mr Pearson said that the exchange preferred the latter option, and one would have to agree. The first option appears to be singularly pointless; you might as well have all bearer shares. The latter option does away with certificates, but presumably you could have a print-out of the state of the shareholdings at any time. The country’s two biggest share registry services are provided by the Bank of New Zealand and NZI Corporations, handling about 60 and 100 listed companies respectively. Another big one is Perkins Hargreaves and Company.