BROKER COMMENT ‘Very weak tone’

Press, 27 April 1987, Page 32

BROKER COMMENT ‘Very weak tone’

Trading on the sharemarket was uneventful last week, with the tone very weak, said Mr Ken Stevens, market operator for the Christchurch sharebroking firm Harkness and Company. The major surprise announcement for the week was Murdoch’s partlyowned INL making a $lO a share bid for Pyne Gould Guiness’ 50 per cent stake in Christchurch Press, which was ex-

tended to the rest of the 1 shareholders, but is still i subject to Commerce and i Overseas Investment Com- < mission approval. 1 With this generous $lO 1 a share bid there was little activity in the com- i pany until later in the : week when about 200,000 shares changed hands which leads to speculation i of an outside bidder, possibly Wilson and Horton but this remains unconfirmed. With world markets looking buoyant and the Australian market closing sharply higher, through strong buying in gold-re-lated stocks, our market seems left out in the cold. The Barclays index was down 87.56 points for the week to close at 3048.42 just 5 points above the year's low, with the SPI closing at 3041 in line with the physical market. ■ The market started off on a weak note and drifted downward from there with once again the blue chip stocks bearing the brunt of the lslls. With the shortened trading week and short-

term interest rates ranging from 30 to 55 per cent institutions and the public couldn’t help but take advantage of these extremely attractive rates. The good announcement on the budget deficit should see interest rates coming back but no immediate effect will be seen for some time yet which does not inspire great confidence for the sharemarket. The downward trend is not so much the evidence of heavy selling pressure, as volumes have remained reasonably light and steady, rather it is still the lack of buying support. Investors have been expecting too much from the market and will have to be a bit more selective in their investments, Mr Stevens said. “For every seller there must be a buyer, without which there is only one way the market can go, especially when you consider money does not appear to be flowing back into the sharemarket but rather into the money market and more attractive offshore markets,” he said.