Market play bogs down

Press, 13 October 1987, Page 25

Market play bogs down

The big cross-play believed to be occurring on the sharemarket and the Barclays futures contract bogged down yesterday. The player is believed to be short in two rising markets. (Those with short, or sold, positions lose when markets rise.) Trading in the Barclays futures index opened yesterday at 3700, 14 points below Friday’s last trade.

The seller was one of the brokers sometimes used by the firm believed to be the player. The contract fell only two points further before prices rallied led by strong buying by Christchurch brokers. Two Auckland brokers with offices in Christchurch were also noticeable in the rally. The contract ended trading for the day at 3800, up 100 points, or $2OOO a contract.

The sharemarket was bullish, too, the Barclays index recovering 45 points. A northern broker com-

mented on the absence of strong selling. “There were no aggressive sellers like there were last week, so that buyers were not really tested.” Brierleys rose 7c and Fletcher Challenge rose 6c. Other leading issues in the Barclays Index were also strong. The hypothesis is that the player has been trading in millions of dollars worth of shares and in the futures index since the Brierleys Investments profit announcement on October 1.

The' player is believed to have dumped shares in the market on Friday, forcing prices down. Yesterday would have been time to begin the final part of the play, withdrawing from the futures market by taking bought positions to close out the "shorts” on which profit was made last week.

The sales at the beginning of trading yesterday may have been to set a down trend for the day. The move was futile.

It is suggested by some market watchers that the player may also be short in the sharemarket. This entails selling shares with the intention of buying them cheaper later to meet the sell orders.

If this is the case, there was no joy in the sharemarket for the player yesterday. The hope for the player

now must be that the Consumer Price Index release today will be bad enough to chill the market into a slide. If it is not, the player may have a few million dollars worth of skin burned off his fingers extracting himself from an exposed position against the direction of two markets.