SHAREMARKET Pessimists multiply as prices turn

Press, 7 October 1987, Page 41

SHAREMARKET Pessimists multiply as prices turn

The sharemarket lost ground yesterday, and most shareholders appear to have turned bearish. Barclays index of industrial shares lost 35.81 points to 3796.96, while the NZSE capital index gave up 11.51 points to 1387.85.

The market looked quite weak, with about twice as many falls as rises, and volatile, as many more stocks changed price than were steady. Trading was quite active, as 15.8 million shares changed hands for $27.6 million — an average of 175 c a share.

Market analysts are becoming more pessimistic, with some now saying that the market is “unrealistically high.” Institutions are not very interested in buying around the 3860 level, but the index futures contract is still showing an “unrealistic” premium over the physical market, one of them said.

The December contract closed for the day at 3985 against Monday’s close of 4090, after trading as high as 4685 and as low as 3966.

Brierley Investments mirrored the market perfectly — early in the morning a seller asking 493 could not find a buyer, and at the end of the day the share closed at 494, down 12c. “The market was markedly weak yester-. day after Monday’s positive start to the week; all major stocks lost ground, with the exception of New Zealand Forest Products,” said Mr John Hutchinson, of the Christchurch sharebroking firm Anderson Reid and Company. Brierley’s profit announcement from last Thursday seems to have been digested very quickly by the market, which is now looking for something else for fuel. A CPI figure is due in about a week but this will probably not be enough to spark the market.

Corporate manoeuvres in the next couple of weeks will help, but the market looks fairly negative at the moment, Mr Hutchinson said.

Not only were there more falls than on Monday, but they were big-

ger. Among the leaders Brierleys was Joined among the losers by Fletchers, Cc down to C#s, Goodman Fielder 5c to C2C, Watties 5c lower at <55, Rainbow ICc to 288, CPD 13c to 348, Feltex Cc to 422, and Euronational 8c to 3M.

Brierleys’ offshoots, lEP of Hong Kong and Tozer KM of the U.K., both fell 7c to 593 and 315, and Robert Jones Investments dropped He to 297. Equiiicorp sold 6c easier at 356. Smaller falls were posted by Chase, 3c to 472, Capital Markets, also 3c to 365, Bank of New Zealand 1c down to 192, and 2c each by Renouf Corporation at 265, Fisher and Paykel at 523, and Judge Corporation at 438.

Against the trend N.Z. Forest Products gained 10c to 496, The shares of Sigma, the gold producer and explorer in the N.Z. Equities camp, were traded for the first time yesterday. More than 2.3 million shares and 1.2 million options changed hands, with the 25c shares closing at 30c.