NZSE whittles scrip queue

Press, 28 November 1987, Page 30

NZSE whittles scrip queue

Some stockmarket investors are still awaiting their share certificates from transactions in 1986 and early 1987, the chairman of the Christchurch-Invercargill Regional Stock Exchange, Mr Tom Anderson, says in his annual report.

"We still have a problem sorting out some 1986 and early 1987 transactions, but in my view the New Zealand Stock Exchange has done everything it humanly can to resolve the issue,” he said.

Mr Anderson asked those waiting for their scrip to exercise more patience “as there is nothing more that can be done, and constant pressure only exacerbates the problem.”

He told “The Press” that the large number of takeover bids, bonus issues, name changes, capital reconstructions, and new issues last year led to the backlog. An example Mr Anderson gave was Kupe, which at various stages of 1987 traded as Kupe Petroleum, Kupe Investments, Apex Group, Grosvenor Properties, and Kupe Group.

“The demands on share registrars to keep up with all these changes was just too great” Originally hundreds of thousands of transactions were affected by the backlog, Mr Anderson said, but he did not believe the monetary value was great in most cases.

He said the scrip delivery problems were alleviated from April 1 this year, when the NZSE adopted a 30-day delivery rule. This means that if shares are not delivered within a month they will be bought in. “For this reason the problems we are looking at took place in 1986 and early in 1987 only. They are not occuring now,” Mr Anderson said.

The NZSE has appointed an Auckland-based team of about five people to resolve the backlog of transactions but Mr Anderson said he does not expect the problems to be resolved before next year.

"Some will go on for years,” he said. His report said brokers have come in for a lot of flak for allowing the excesses of

1986 to happen. “In retrospect, I know of no way we could have prevented it given the circumstances that prevailed at the time.

“It was asking too much of brokers to have a system in nlace which would cope with the extremes, especially during a year when volumes were at record levels and some share registrars had become hopelessly bogged down and were running months behind schedule." He told “The Press” that had brokers been left alone to clean up the mess, it would probably be cleaned up by now. However, he said, the action taken by the NZSE had taken a lot of pressure off brokers who had been working "every spare week-end and late every night.”

Mr Anderson said the

sharemarket crash would help clear the scrip backlog, as stockbrokers could buy in undelivered shares at the lower prices.

"A similar situation occurred in Australia fifteen years ago,” he said.

Mr Anderson said in the report that although the collapse of the sharemarket has been headline news around the world, he considers the implications of “our wildly fluctuating currency” should be of much greater concern.

“To what extent we are being manipulated is not clear, but the uncertainties it (the N.Z. dollar) is creating for our export manufacturers must inevitably affect their trading position and the value of their shares.”