BSI contract may be waking from slumber

Press, 28 May 1988, Page 32

BSI contract may be waking from slumber

Frustration at the directionless trading in interest rate contracts hit futures last week, said the manager of Mair Astley Futures, Mr Geoff McDonnell. However, some relief was expressed as the Barclay’s share index contract showed signs of stirring from its slumber. The currency pundits continue to have a field day as the N.Z. dollar and the Australian dollar rise against the greenback, Mr McDonnell said. “All in all it looks as if currency trading and share index futures trading are perceived by the market as being the places where opportunities for profit abound.” The manager of Egden Wignail Futures, Dr Brent Layton, said the sharemarket lifted sharply during the week.

Futures went from the substantial discount they had been at for several weeks to a premium of up 30 points at times. Even when the New Zealand market softened slightly late in the week futures maintained their bullish premium. “With the Australian market very firm after the minibudget there, and picked to remain firm until the end of June, when Australia’s fiscal year ends, the outlook is for Barclay’s futures to rise in the medium term,” Dr Layton said. Mr McDonnell said Wall Street remained relatively stable during the week, which removed some nervousness from the local scene. "However, it was offshore interest in N.Z. equities rather than local interest which underpinned the N.Z. sharemarket.

“We see volatility continuing on offshore markets, with perhaps the Dow Jones and the Nikkei showing signs of consolidation at their current levels. “All these factors mean the Barclays will remain volatile and needs to rise to clear 2050 to signify the end of the bear run that began in October 1987,” Mr McDonnell said. Government stock futures were sold off sharply to below 8700 on Friday when Australian bond futures dropped by over 25 points. "The short term outlook is for futures to be weak. The need to settle on the last tender early next week and the prospect of another tender early in June should constrain buyers,” Dr Layton said. June bank bill futures traded up and down in a 30 point range during the week in response to movements in the call rate and in Government stock rates. Volume was moderately heavy in the nearer months. “Prices are likely to ease off early next week due to the liquidity pressures of settling on last months Government stock tender. After the market has digested this, a small rally is likely,” Dr Layton said. In Australia the stockmarket futures contract moved up 100 points last week. The expectation of a positive economic statement by Treasurer, Paul Keating, and the favourable reaction by the market to his statement all helped underpin the Australian sharemarket, Mr McDonnell said. “However with such a rapid rise up of their futures contract and a premium in it of some 45 points over physicals, a correction downwards would be expected.”

Wool futures had another quiet week as the strength of the Kiwi discouraged buying interest. Wool prices eased on Thursday at Napier. The Wool Board was active in its support. There are three more auctions left this season, with the next set for June 16. SUS CONTRACTS Mth Open H/L Last Vol Jun. 14400 400/400 700 1 Sep. 14700 735/675 735 9 Contracts traded: 10. Open positions at May 26: Jun 309, Aug 2, Sep 6, Dec 9, total 326 (down 9). COMMERCIAL BILLS Mth Open H/L Last Vol Contracts traded: nil. Open positions at May 26: Jun 10, total 10 (same). GOVERNMENT STOCK Mth Open H/L Last Vol Jun. 8712 715/695 695 2818 Sep. 8736 736/706 725 39 Contracts traded: 2857. Open positions at May 26: Jun 6584, Sep 452, total 7036 (down 76). WOOL Mth Open H/L Last Vol Contracts traded: nil. Open positions at May 26: May 31, Aug 126, Oct 66, Dec 55, Jan 1, Mar 3, total 282 (same). 90-DAY BANK BILLS Mth Open H/L Last Vol Jun. 8444 449/430 434 290 Jly 8470 475/470 470 13 Aug. 8490 500/490 495 15 Dec. 8565 565/565 565 10 Contracts traded: 328. Open positions at May 26: Jun 1599, Jly 300, Aug 12, Sep 373, Dec 336, Mar 105, Jun 19, Sep 7, total 2751 (up 10). SYDNEY ALL-ORDS (half-points omitted) Prev. Mth close H/L Last Vol Jun. 1558 566/542 546 1321 Contracts traded: 1321. Open positions at May 25: 5121 (down 346). BARCLAY’S SHARE INDEX Mth Open H/L Last Vol Jun. 2027 034/016 030 26 Contracts traded: 26. Open positions at May 25: Jun 137, Sep 47, Dec 1, total 185 (up 275).

N.Z. FUTURES MARKET WEEK ENDED May 27 Trading Traded prices Total Open months This week To date this cont’s $US High Low Last High Low week Jun ’88 1.4487 1.4351 1.4400 1.5900 1.4351 544 309 Jul ’88 1.4985 1.4751 0 0 Aug ’88 1.4586 1.4586 1.4586 1.45861.4586 2 2 Sep ’88 1.4735 1.4675 1.4735 1.60051.4675 9 6 Dec ’88 1.5603 1.5603 1.5603 1.6208 1.5225 2 9 Totals 557 326 PCP Jun ’88 8450 7815 10 Totals 10 GOVERNMENT STOCK Jun ’88 8725 8695 8695 8739 ’8400 5809 6584 Sep ’88 8750 8706 8725 8768 8520 134 452 Dec ’88 8660 8460 Totals 5943 7036 WOOL May ’88 645 645 645 780 575 4 31 Aug ’88 655 655 655 785 635 1 126 Oct ’88 755 660 66 Dec ’88 789 655 55 Jan ’89 800 685 1 Mar '89 705 700 3 Totals 5 282 Tenderable stock: bales. 35F2D quotes - - 602 in Napier 26/5/ 88 90-DAY BANK ACCEPTED BILLS Jun ’88 8460 8420 8434 8625 8100 1064 1599 Jul ’88 8490 8445 8470 8550 8445 166 300 Aug ’88 8515 8480 8495 8525 8480 42 12 Sep ’88 8550 8505 8530 8650 8100 55 373 Dec ’88 8580 8550 8565 8645 8100 61 336 Mar ’89 8580 8580 8580 8640 8200 20 105 Jun ’89 8650 8320 19 Sep ’89 8500 8470 7 Totals 1408 2751 BARCLAY’S SHARE INDEX Jun ’88 2048 1935 2030 2160 1675 362 137 Sep ’88 2120 2120 2120 2130 1930 1 47 Dec ’88 2190 2070 2190 2190 2070 2 1 Totals 365 185