FUTURES Heavy drop for BSI

Press, 2 December 1987, Page 43

FUTURES Heavy drop for BSI

The Barclays Share Price Index futures market dropped heavily yesterday, on the back of a further slide in the physical market. The December contract fell quickly below 1900 and broke its previous 18 monthly low to touch 1850 before rebounding up. Mr Mark Thiele of Egden Wignail Futures said that at 1850 the contract bounced because the level was too low to sustain. With less than a month to go till the end of the contract it had to bounce, he said. After reaching its low the contract rallied. It closed at 1945, a 142 point discount to the physical, after a high of 1990. “Obviously it’s still in a bear trend,” Mr Thiele said. “You would have to be brave to buy at the moment.” The physical market is being heavily influenced by Wall Street, Mr Thiele said. “The United States is heavily selling our market down,” he said. “The downtrend is definitely still intact,” he added. Interest rate futures were strong with both the Government Stock and 90day Bank Bill contracts closing at new highs. “The Government Stock contract is making an as-

sault on its previous high of 8485,” Mr Thiele said. He said that after that point the next break-out point will be 8500. Brokers say the trend is still for interest rates to go well down. They say the Reserve Bank will not intervene in this unless the rates begin to fall too quickly. “A sudden drop in interest rates fuels inflation and the Reserve Bank won’t want that,” Mr Thiele said. He said sharply lower interest rates fuel increasesd borrowing. This leads to increased consumer spending, and thus a rise in prices because of the increased demand. The Reserve Bank yesterday reduced its primary liquidity target for the month from SSISM to S4OOM. Mr Thiele said the interest rate futures market reacted slightly when this news was announced, but basically carried on as usual. “It should have tightened interest rates but it actually had only a very small effect on the market,” he said. In Sydney, after being down over 50 points, December share price index futures closed at 1279.0. SUS CONTRACTS Mth Open H/L Last Vol Dec 1.5390 390/390 390 1

Contracts traded: 1. Open positions at November 30: Dec 169 (down 235). COMMERCIAL BILLS

Contracts traded: nil. Open positions at November 30: Dec 40, Mar 39, Jun 10, total 89 (same). GOVERNMENT STOCK Mth Open H/L Last Vol Dec 8471 485/471 483 907 Mar 8515 525/515 517 53 Contracts traded: 960.

Open positions at November 30: Dec 2556, Mar 88, Jun 70, total 2714 (down 73). WOOL Mth Open H/L Last Vol Dec 640 640/640 640 1 Jan 655 655/650 650 16 Mar 680 680/680 680 17 May 695 695/695 695 2 Contracts traded: 36.

Open positions at November 30: Dec 76, Jan 285, Mar 346, May 317, Aug 34, Oct 1, Dec 2, total 1061 (up 2).

99-DAY BANK BILLS Mth Open H/L Last Vol Dec 8330 335/306 335 242 Jan 8330 335/310 335 39 Jun 8420 420/420 420 2 Dec 8450 450/450 450 6 Contracts traded: 289.

Open positions at November 30: Dec 815, Jan 335, Feb 80, Mar 346, Jun 205, Sep 165, Dec 180, Mar 27, Jun 12, total 2165 (down 8). SYDNEY ALL-ORDS (half-points omitted) Prev.

Mth close H/L Last Vol Dec 1292 285/231 279 1221 Mar 1302 260/242 259 213 Contracts traded: 1434. Open positions at November 30: 8716. BARCLAY’S SHARE INDEX Mth Open H/L Last Vol Dec 1885 990/850 945 168 Contracts traded: 168.

Open positions at November 30: Dec 385, Apr 14, total 399 (down 4).