SHAREMARKET Downward move continuing

Press, 24 April 1987, Page 27

SHAREMARKET Downward move continuing

The sharemarket continued its downward movement yesterday, with some sharebrokers talking of a “free fall.” However, trading was quiet, with the customary 7.2 million shares changing hands for $15.2 million — an average of 211 c a share. The N.Z.S.E. capital index dropped 14.41 points to 1096.29, its lowest level since August 8. Again falls outnumbered rises eight to five, with market leaders bearing the brunt. Much of the selling pressure appeared to be coming from institutions that are finding it hard to resist the lure of the current high interest rates. Call rates reached 60 per cent at one stage yesterday and closed at

37 per cent One broker said he did not expect the money market to turn around until the middle of May. Some sharebrokers saw the sharemarket as likely to slide further in the interim, with the announcement of a highlyfavourable $1.95 billion fiscal deficit out-turn for 1986-87 late yesterday unlikely to have much discernible impact on the market. The market was being driven very much by short-term thinking at present, one of them said. “Prices on the New Zealand Stock Exchange continued their downward drift yesterday,” said Mr Roger Howell, of Jordan Sandman Smythe, Ltd, Christchurch sharebroker. “Barclays’ index

was down 43.3 points to close at 3676.5, near the low for the year of 3647.5. “Very high short term interest rates continue to influence the downward drift of NX share prices — overnight rates reaching up to 66 per cent during the day. The announcement by the Minister of Finance that the 1686-87 budget deficit is $1.95 billion is less than many commentators predicted, and provides some positive hews for the market,” Mr Howell said. “Trading In Christchurch Press shares was heavy, turnover valued at $2.1 million. The stock moved up $2 to the $l6 price being offered by Independent Newspapers.