Prices down but off lows

Press, 23 November 1988, Page 46

Prices down but off lows

The sharemarket lost further ground yesterday, although bargain hunting in the afternoon pulled it back a little from the day’s lows. The Barclay’s index of industrial shares fell 7.44 points to 1867.96, but the NZSE gross index dropped proportionately twice as much — 4.68 points to 685.92. This is 68.6 per cent of its level at July 1, 1986. At one stage of the morning it was estimated that the Barclays was off some 24 points. Falls outnumbered rises seven to four, on a turnover of 7.8 million shares traded for $13.7 million — an average of 176 c a share. Financial markets remain unsettled because of the widelyheld view that the Prime Minister, Mr Lange, and the Minister of Finance, Mr Douglas, are unable to reconcile differences. Share traders reacted, especially in the morning, by staying out of the market — causing prices to fall on small volume. Government stock dealers were also reluctant to buy, with the result that the upward momentum in benchmark five-year stock yields continued, carrying them to a high of 13.46 per cent. The market also reacted to Monday’s NZI Corp announcement. NZI lost 10c to 68 after

being down to 65c at one stage in the morning session. The company’s loss had been expected and largely discounted, but the intention to raise new capital with rights and loan stock issues hit the market with a dull thud. Feltrax International was the volume leader, with 1,734,107 shares. The shares closed 1c up to 318 after most of the volume changed hands for 320, with speculation that the buyer was BTRNylex, the Australian conglomerate awaiting completion of its deal to purchase Equitiicorp International’s 80 per cent of Feltrax. Brierley Investments eased 1c to 126, and TozerKM slipped 3c to 275, but lEP edged up Ic, to 206. Carter Holt dropped 4c to 176, Magnum also 4c, to 386, while Lion Nathan was 2c lower at 265. Fletcher Challenge recovered 2c to 450, and Elders NZFP at 332 and Goodman Fielder Wattle at 285 both put on 4c. Others among the few improvers were Mair, up 2c to 225 and Capital Markets, 1c higher to 136. Newspaper proprietors did not escape the general malaise, with Wilson and Horton down 8c to 555, and INI. 3c down to 402.

Banks were fairly resilient, although Countrywide gave up 3c to fall to 227. Robert Jones Investments lost 2c to 108, and Lane Walker Rudkin fell the same amount to 113, while EuroNational also lost 2c, to 30. Falls of 5c each were posted by ICINZ at 220, Kupe Group at 20, and New Zealand Equities at 70. The political uncertainty also affected the bond market where yields are rising in proportion to the degree of uncertainty. Fundamentals and technical factors are ignored, as are the words of wisdom from the Governor of the Reserve Bank. With high interest rates the New Zealand dollar remains high, and none of this is good for the sharemarket. Mr Simon Flood, of Egden Wignall and Company, said that more active interest was shown in shares perceived to be oversold. The international shares, institutional favourites, were in demand. “However, the market is thin and appears to be lacking in depth. The buying support just appeared suddenly, but because of the lack of volume was not tested. The market is unlikely to pick up until the emergence of substantially more solid demand.