SHAREMARKET Prices slump on fears of Douglas resignation

Press, 10 February 1988, Page 37

SHAREMARKET Prices slump on fears of Douglas resignation

Continuing fears that the Minister of Finance, Mr Douglas, may still resign pushed the New Zealand sharemarket sharply lower yesterday. The Barclays index of industrial shares slumped 42.99 points to 1720.50 — equivalent to a fall in the price level of about 2.5 per cent — and the N.Z.S.E. capital index was down 11.77 points to 614.86. The market is now at the level first reached on November 25, 1985. Once again there were three falls for every one rise, and while leading shares were prominent among the falls it was difficult to spot significant rises.

Turnover was in line with this year’s average, 7.5 million shares, and the total value $9.3 million — an average of 123 c a share.

“A lack of buyers rather than any real selling pressure continues to plague our market, coupled with the Government’s failure to react quickly to the current tax package reconstruction,” a Wellington sharebroker said.

“Hopes of further gains after last Friday’s 38.5 point rise were dashed by further rumours about the future of Mr Douglas. Lion Corp fell 3c to 605 and L. D. Nathan 5c to 580 ahead of the announcement of a Securities Commission inquiry into the proposed merger between the two companies.

Among blue-chip indus-

trials • Goodman Fielder had the largest fall, 16c to 205, followed by Fisher and Paykel, down 10c to 355 and Bank of New Zealand which lost 9c to 108.

Fletcher Challenge fell 7c to 405, as did Brierley Investments (to 121) and lEP, down to 120, while Tozer KM eased 2c to 180. Carter Holt and NZ Forest Products lost 3c each, to 142 and 267, and NZI dropped 4c to 163. Waitaki was 5c lower to an even dollar.

Investment companies among the falls were Robert Jones, 5c down to 90, Chase, also 5c to 80, Capital Markets, 4c to 91, while easing 1c each were Equiticorp at 114, Kupe (40), Judge Corp (10) and Charter (2). The second-line stock, Energy Corp., posted the day’s biggest drop, 75c to 125.

Among the few rises against the trend were noted 3c gains by Magnum at 375 and Petrocorp at 131. Wilson and Horton put on 10c to 500 and Countrywide 2c to 117.

The favourable report on oil and gas flow testing at Kupe 3B South affected the two listed New Zealand participants in different ways:— NZOG rose 2c to 45, but Oilfields slipped 1c to 13.

March share price index futures slumped to a low of 1645 before closing at 1650, 70 points down on Monday’s close of 1720.