Broker sees stability

Press, 20 December 1986, Page 29

Broker sees stability

“The market closed unexpectantly quiet and one got the distinct impression that many avid investors had simply run out of energy and/or funds,” said Mr Brian Kreft, of Forsyth Barr and Company, Dunedin sharebroker. “Over the next four weeks we will see the experts, analysts, and probably ‘Uncle Tom Cobbly and all’ coming out with their picks for the 1987 calendar year.

“We would like to take time out to reflect on the performance of industry sectors, and key companies within those sectors during the past 12 months and conduct projections of our findings in these two key areas for 1987, Mr Kreft said.

It does appear though that the financial services sector of the market could be the darling of 1987 as was the property sector throughout 1986. This sector could be closely followed by servicing companies with an emphasis allied to the food industry, and finally the property sector is bound to continue to captivate investor attention.

“Across the Tasman it would be very difficult for us to generalise on industry sectors. Our current thinking is to follow New Zealand-driven companies such as Ariadne, and its associates Industrial Equity, Barwon, etc. “Contrary to our previous predictions the expected bull phase up to Christmas did not occur, however it is likely that there will be some strengthening in prices during the month of January but the outlook for the first quarter of 1987 is generally flat,” he said. The likely political instability that surrounds an election year will cause adverse factors which will reflect in the market increasingly throughout 1987, by the tightening in liquidity brought about by GST which will start to bite in the first half of 1987, and will cause interest rates to remain firm during that period. "In summary, therefore, we do not see a decline in equity prices next year, but rises of the magnitude of 1986 are unlikely to" occur,” Mr Kreft said.