BROKER COMMENT Spring trading

Press, 8 October 1988, Page 28

BROKER COMMENT Spring trading

After several weeks of lacklustre trading, pessimism, and inactivity on the New Zealand sharemarket this week will be remembered as one which provided investors with renewed optimism and confidence, says Mr Simon Flood, market-operator for Egden Wignail and Company. The week got off to a flying start with New Zealnad’s favourite blue chip issue, Brierley Investments, reporting its profit for the year. The profit of $264M was in line with market expectations and after reviewing the published financial statements one can appreciate how successfully the company has tackled what has been a difficult year. Brierley has been worked hard reducing its debt exposure through a strategy of selected sales. The post-balance date sales of stakes in Calmat, NZI, and Bell Resources have further reduced Brierley’s debt by about $l.l billion. When the company reported its interim profit in December the investment fluctuation provision had been depleted $1.57 billion, and stood at a deficit of $846

million. Now the provision stands at a surplus of S43IM. This demonstrates an excellent recovery and an application of a strategy which was reinforced the solid foundations of the Brierley empire.

Mr Allan Hawkin’s Equiticorp International since relisting in its new form has been battered by waves of selling pressure that caused the share price to drop to a low of 37c. The market has been concerned at the high level of debt being carried by the company. Conscious of the need to address this problem and after several approaches, Equiticorp began to consider selling its 80 per cent stake in Feltrax International, New Zealand’s second largest industrial company.

On Tuesday, Mr Hawkins announced that an agreement had been struck with BTR Nylex, of Australia, for the sale of Feltrax. The sale does not include the 80 per cent stakes of New Zealand Steel, which is owned by Feltrax, but negotiations for its disposal are at an advanced stage.