FUTURES High rates rule

Press, 3 April 1987, Page 9

FUTURES High rates rule

High interest rates continued to rule most contracts on the New Zealand Futures Exchange yesterday. Although the rates, particularly for call, were not as high as earlier in the week, the squeeze had an impact on the two interest rate contracts. In addition, the higher rates also helped support a firmer New Zealand dollar, influencing the U.S. dollar and wool contracts.

Mr David Halligan, a trader for Jordan Sandman Futures, said yesterday that the high call rates had again created a volatile Government stock (GSK) contract. “Cash is king at the moment,” he said, adding that call rates had been up around 45 per cent to 48 per cent.

However, these rates are not as high as those applying earlier this week when liquidity was tight because of the requirement for tax payments.

Mr Halligan said that the GSK contract had "flicked both ways,” which seems to indicate uncertainty, by participants about which way interest rates are going to go. The trading range for June was 23 points, and the contract closed at 8301, 4 points below the high. Mr Halligan described the bank accepted bills (BAB) contract, which is also based on interest rates, as disappointing.

He considered that the contract could be an extremely good one and he was critical that the main trading banks and financial institutions, who were on the exchange, were not prepared to become involved.

At the moment the GSK and Barclays contracts made up 90 per cent of trading. If the BAB contract was traded at about 500 lots a day there would be the basis for an extremely good futures market, he said. The Barclays, contract was also extremely volatile yesterday although the trading range was not as great as the previous two sessions. The contract moved in a range of 3230 to 3168, before closing at 3190.

The wool contract was firmer across the board in quiet trading, he said. In Sydney, spot June share price index futures closed 5.1 points up at 1676.1. Details of yesterday’s trading were: JUS CONTRACTS Mth Open H/L Last Vol Apr 1.7700 7700/7700 7700 1 May 1.8000 8000/8000 8000 6 Contracts traded: 7 • Open positions at Apr 1: Apr 377, May 21, Jun 12, total 410 (up 5). COMMERCIAL BILLS Mth Open H/L Last Vol Contracts traded: Nil Open positions at Apr 1: Jun 123, Sep 43, Dec 40, Mar 39, Jun 10, total 255 (same). GOVERNMENT STOCK Mth Open H/L Last Vol Apr 8293 293/293 293 10 Jun 8294 305/282 301 1286 Sep 8360 360/360 360 10 Contracts traded: 1306 Open positions at Apr 1: Apr 12, Jun 3060, Sep 1, Dec 105, total 3178 (up 6). WOOL

Contracts traded: 51 Open positions at Apr 1: May 147, Aug 121, Oct 110, Dec 112, Jan 234, Mar 192, May 85, Aug 16,. total 1017 (up 19). WHEAT Mth Open H/L Last Vol Contracts traded: Nil Open positions at Apr 1: May 7, total 7 (same). M-DAY BANK BILLS

Open positions at Apr 1: Apr 381, May 293, Jun 257, Sep 112, Dec 44, Mar 53, Jun 40, Sep 40, Dec 40, total 1260 (up 54).

BARCLAY’S SHARE INDEX Mth Open H/L Last Voi Jun 3180 230/168 190 487 Contracts traded: 487

Open positions at Apr 1: Jun 627, Dec 82, total 709 (up 145).

Mth Open H/L Last Vol May 670 670/670 670 3 Aug 695 695/695 695 5 Oct 710 712/710 712 11 Dec 720 721/719 721 7 Jan 718 722/718 722 22 Mar 730 730/730 730 3

Mth Open H/L Last Vol Apr 7460 470/445 470 29 May 7660 680/651 670 25 Jun 7860 860/825 825 25 Sep 8160 160/150 150 50 Contracts traded: 129