SHAREMARKET Selling pressure intensified

Press, 24 September 1987, Page 30

SHAREMARKET Selling pressure intensified

The sharemarket decline of the last three days intensified, as selling pressure took most of the leading stocks down. Not many shares changed hands in the morning, although that was when the major falls occurred. In the afternoon more shares were sold, but the market absorbed the selling pressure more easily, and investors put the brake on the sharp decline, although prices kept falling. Falls outnumbered rises seven to three, and the greater activity in the afternoon was reflected in the high turnover of 17.7 million shares worth $25.2 million — an average of 143 c a share.

There were signs of buying support towards the close, although the weakness of the Australian market is a negative Influence.

Neither was the tone helped by rumours of a large cash placement by Equiticorp to fund its bld for Guinness Peat, the United Kingdom merchant bank. Prospective buyers moved to the sidelines, possibly girding their loins for this and other issues in the pipeline such as the Government’s announcement on the sale of Petrocorp shares. The market today was uncertain and restless, sparked by the Government’s declared intention to sell its majority stake in Petrocorp, said Mr Simon Flood, of the Christchurch Sharebroking firm, Egden Wignail and Company. The Government’s declaration sparked doubt about Petrocorp’s standing, on speculation of how easy the Petrocorp stake will be to sell. However, it appears the Government will be

able to sell its stake successfully, he said. The last two weeks have seen friction on the New Zealand stockmarket with the likes of the Rada-FCL flight for NZ Forest Products. Also, there have been a host of tremendous profit announcements. Fletcher Challenge, lEP and Renouf for example. This week the market has nothing to look forward to. The market is at present taking a little breather. Time is needed for it to consolidate before it pushes through the 4000 point barrier. The market is looking for a good CPI figure and this may spark enthusiasm. The BIL result (due early October) is also being looked to as a directional indicator for the market. But on the whole, Mr Flood said, the trend is definitely up.