SHAREMARKET Biggest fall of 1988

Press, 28 January 1988, Page 26

SHAREMARKET Biggest fall of 1988

The New Zealand sharemarket had its biggest fall of the new year so far, with the Barclays index dropping 54.21 points to 1854.53 and the NZSE capital index down 15.25 points to 666.36. Volume was quite respectable, with a turnover of 10.6 million shares, but the value remains low, the total of $12.9 million representing an average of 121 c a share. Significant falls were posted by Brierleys, 9c to 140, Goodman Fielder 10c to 220, Magnum 10c to 400, Newmans 12c to 100, NZFP 7c to 295, Fletchers 5c to 430, and Progressive Enterprises 18c to 360. Among investment and property companies, Capital Markets lost 12c to 98, Wellesley 15c to 65, Chase 6c to 90, Equiticorp 7c to 136, and Robert Jones Investments 4c to 99.

Mr David Templeton, of the Christchurch office of Jordan Sandman Smythe, Ltd, said that the sharemarket closed on a significantly weak note yesterday with prices closing lower across the board. This was especially evident in the afternoon session as all stocks became affected by the momentum of the selling pressure which emerged. “Trading was characterised by a continuation of the recent trend, with sellers being prepared to meet a lower market, while buyers remain on the sidelines. “There has been much talk in recent weeks of the possibility of a rally .occurring in the first half of 1988; however, current investor sentiment seems to reflect an anticipation that the market will go lower in the immediate future. “Major influences on

the market seem to be underpinning this trend as investors cannot see anything positive ahead, while investment funds are being diverted into attractive fixed interest alternatives, taxation payments fall due, uncertainties on the international scene continue to maintain their presence, and corporate worries continue to hand over the market (the Justice Department inquiry into the Rada/Prorada/ N.Z.F.P. web as an example.) “Sharemarket investors have since October experienced the pain of a falling market, and many are now considering other forms of investment. Fixed interest looks an attractive alternative, as inflation falls and along with it, interest rates. “However, investors would be wise not to ignore equities, as his-

tory has shown that sharemarkets are by nature, cyclical, Mr Templeton said. Mr Guy Spooner, of Marshall Equities, Christchurch sharebrokers, said that once again yesterday the market reacted in a negative mood. “Investor confidence over the short term has been weakened by such events as the investigation into N.Z.F.P., Rada, Prorada, lack of buying support in frontline stocks, and see-saw movements in offshore markets. “The one good thing that will result from the comparatively short and sharp fall of the New Zealand sharemarket is that although many investors are hurting, the bottom will be reached that much quicker, and therefore a speedier recovery may occur in the medium to longer term,” Mr Spooner said.