FUTURES Share contract’s $12,900 move

Press, 4 February 1987, Page 38

FUTURES Share contract’s $12,900 move

A corrective rise in the sharemarket, soaring interest rates, and the strong New Zealand dollar dominated the futures market yesterday. March share index contracts were up 115 points at the close on Monday’s close. This represents $2300 a contract and compares with a rise of 65.03 points in the index itself. At the close, March futures were at 3230, a discount of only 0.57 per cent to the index, which was at 3248.68. Share-index futures were launched on January 5. March contracts closed that day at 3875 points. They have since fallen 645 points. This is a gain of $12,900 a contract, or about 1075 per cent on the initial deposit, to those who have held a short (selling position) since then. Those long (with buying positions) on the contract over the same period would have made a $12,900 loss. Trading in share futures was again heavy yesterday (754 contracts). Mr Geoff McDonnell, futures manager of Mair Astley, Ltd, said it looked from the performance of some of the leading shares yesterday that the index might rise. However, a chartist, Mr Mark Thiele, of Egden Wignall Futures, said he believed the Barclays index was likely to fall back to 3200. Wool futures surged, with 300 trades and prices a few cents easier in most months. Mr McDonnell linked the fall to the strength of the New Zealand dollar. Interest rates soared during the day. Mr McDonnell said the call rate was at 30 per cent and 90-day bills were at 24.75 per cent. Mr McDonnell suggested the movement in interest rates might be a repeat of the surge in early 1985. Mr Thiele said both the bank-accepted ■ bills and the Government stock contracts looked weak on the charts.

Interest-rate futures, which move inversely to the physical markets, fell, the

March Government stock contract by 16 points. The February 90-day bankaccepted bills contract was down 55 points (close to close), and the March contract was down 57 points.

Only three United States dollar futures contracts were traded, despite movement in the New Zealand dollar on the foreign-exchange market Mr Thiele believes the kiwi dollar is still likely to fall sharply, by up to three United States cents if it does not rise through 54.5 c. In Sydney, March share price index futures closed 25.5 points higher at 1485.0, a 17.5 point discount to the physical. Details of yesterday’s New Zealand trading: JUS CONTRACTS Mth Open H/L Last Vol Feb 1.8440 .8440/440 8440 2 Mar 1.8695 .8695/695 8695 1 Contracts traded: 3. Open positions at Feb 2: Feb 105, Mar 149, Jun 1, total 255 (up 2). COMMERCIAL BILLS Contracts traded: nil Open positions: same, GOVERNMENT STOCK Mth Open H/L Last Vol Mar 8275 275/261 262 321 Jun 8310 310/310 310 81 Contracts traded: 402. Open positions at Feb 2: Mar 2247, Jun 68, total 2315 (up 41).

Contracts traded: 300. Open positions at Feb 2: Mar 232, May 508, Aug 196, Oct 187, Dec 137, Jan 202. Mar 184, May 104, total 1750 (down 3).

WHEAT Mth Open H/L Last Vol Feb 220 220/220 220 • 1 May 215 215/215 215 1 Contracts traded: 2. Open positions at Feb 2: Feb 2, Mar 24, May 18, total 44 (down 6). 99-DAY BANK BILLS Mth Open H/L Last Vol Feb 7625 625/590 590 79 Mar 7730 730/683 683 87 Contracts traded: 166. Open positions at Feb 2: Feb 311, Mar 318, Jun 72, Sep 16. Dec 41, Mar 41, Jun 40, Sep 40, Dec 40, total 919 (up 58). BARCLAY? SHARE INDEX Mth Open H/L Last Vol Mar 3130 270/130 230 754 Contracts traded: 754. Open positions at Feb 2: Mar 614, Jun 33, total 647 (down 121). _____

WOOL Mth Open H/L Last Vol Mar 576 576/573 574 10 May 595 595/590 592 163 Aug 615 615/612 612. 36 Oct 615 616/615 616 31 Dec 618 620/618 620 17 Jan 623 623/620 623 26 Mar 630 632/630 630 14 May 635 635/635 635 3