‘Pack of kids’ blamed for panic

Press, 21 October 1987, Page 1

‘Pack of kids’ blamed for panic

By

DAVE WILSON

A Christchurch sharebroker, surveying the wreckage after one of the worst sharemarket days on record, laid the blame for the selling stampede on a pack of kids in Auckland. “It’s a worrying state of affairs when the money market is controlled by Auckland and Auckland is run by a pack of kids,” was the view of Mr Tim Preston, trading floor supervisor of the Christchurch-Inver-cargill Stock Exchange. Describing one of the worst share-trading days on record as “a bit of a massacre,” Mr Preston said he felt soiyy for Auckland clients whose morning sell instructions were acted on by young stock market operators with no feeling for the market.

“They’re kids, 21 to 22-years-old. They have no feeling for the market and they know it’s not their money if stocks plunge. “The operators in this area have been around a bit longer, we are more conservative and have a closer client relationship. I didn’t execute any sell orders this morning. I gave all my clients a chance to change their mind and indeed half of them did change their minds.” When the market opened for the afternoon trading session, the selling panic had begun to ease and prices for several blue ribbon stocks were beginning to nudge upwards again. While brokers and operators yelled transactions across the floor, the public gallery was packed with onlookers attend-

tag what was for many the best live drama in town. From their remarks most seemed to be small investors. A sprinkling of the audience appeared to be interested onlookers not affected by share prices.

One grim-faced man murmured that he lost $32,4H yesterday morning. Another investor, reflecting an afternoon trend of buying stock at bargain prices, seemed quite happy with events. “I’m making a killing. The time to buy is right I’m looking at Brierley and Jones.” In his bag were “several thousand” Brierley shares bought for 3Mc each compared with Monday’s price of 443 c. On the trading floor greysuited stock exchange em-

ployees dealt with the rapid-fire instructions from operators, working in their shirt-sleeves and at times juggling two telephones to keep pack with sell and buy requests. ’ Brierley Investments and Robert Jones stocks seemed to be the most debated shares. The “chaikies,” the women responsible for marking the transaction prices on the Top 41 board which feeds into the Barclay’s Index, spent much of their time hovering near the BRY and RJO columns which reflected the health of Messrs Brierley and Jones. At times prices were being marked and replaced with new prices within two seconds. One stock exchange employee regarded the hectic activity and remarked, “It’s one of the most

vigorous markets I have seen in the five and a half yean I have worked here. ' > “Tempers have been good though. They are a pretty stable lot here.”

Mr Preston felt the volatility of the market might have been partly because of the share market’s alignment with the futures market

“There may have to be a rule imposed where sharebrokers are not allowed to be Involved in the futures market” he said. He expected the market today to consolidate, but added that any trend would be influenced" by what happened in: Wall Street

“One thing, it will take the market a long time to recover investor confidence, both here and around the world.”