No panic, but not much joy either

Press, 24 August 1988, Page 42

No panic, but not much joy either

Falls outnumbered rises more than two to one in the New Zealand sharemarket yesterday, in very quiet trading. However, investors refused to be panicked by the Dow Jones’ slide below 2000 overnight. The market’s weakness 'was particularly evident during the morning session, while the slide was almost halted in the afternoon when some offshore buying offset most of the negative sentiment. But many Australian investors stayed out of the market ahead of the Australian Budget, although this is generally expected to be a positive influence on the market and therefore also on New Zealand shares. The weakening New Zealand dollar helped attract buyers yesterday, but there was hardly any domestic interest, which was reflected in the low turnover of 6.7 million shares valued at $11.3 million — an average of 169 c a share. The big three, Fletcher Challenge, Brierley Investments, and Goodman Fielder, topped the turn-: over — in that order. The first 10 by volume, eight of them top-tier

stocks, accounted for more than half the trades. Fletchers slipped 1c to 499, Brierleys 2c to 153, while Goodman reversed its recent run and dropped 4c to 296. The Barclays index of industrial shares declined 12.34 points to 2030.20, and the N.Z.S.E. gross index was 3.75 points down to 736.65. Lion Nathan and Chase Corp were the only two among the top 10 to gain — Lion 2c to 262, and Chase 1c to 116. N.Z.I. Corp lost 3c to 132, Carter Holt was 2c lower at 158 while 1c falls were chalked up by Robert Jones Investments at 112, and Elders N.Z.F.P. at 386.

Mr David Templeton, of the Christchurch office of Jordan Sandman Smythe, said that trading on the New Zealand Stock Exchange yesterday showed some maturity in the face Of a further decline in overseas markets overnight “Once again trading was dominated by the afternoon session — consistent with the recent trend which has seen Australian buyers taking advantage of a weaker

New Zealand dollar in search of relative value among our leaders. “Consequently, trading continues to be characterised by a large number of reportings, which is tending to hide the still low volume of shares actually traded on the trading floors. “Our market has yet to show any response to the recent further declines in both interest and exchange rates, as investors remain content to stay on the sidelines. “Although largely anticipated, Electricorp’s three-year $2.5 billion tender programme, announced on Monday, caused some selling in the short end of the money market, while the bill market seemed to stall as rates for 90-day paper closed at 14.10.

“The medium term outlook for interest rates continues to look very bullish, however. “The New Zealand dollar recovered slightly in afternoon trading, although the over-all trend remains weak — which will be good news for exporters,” Mr Templeton said. -

The September share price futures contract dropped 17 points to 2953.