SHAREMARKET Uncertainty grinds trading to a halt

Press, 1 December 1988, Page 25

SHAREMARKET Uncertainty grinds trading to a halt

The New Zealand sharemarket ground virtually to a halt yesterday as only 4.7 million shares were traded. Prices were mixed with a slightly firmer bias at the close, failing to hold on to the morning’s gains. The market continues to track overseas markets, in the absence of domestic news. It started the day on a very firm note as it sheepishly followed Wall Street’s firm overnight lead, but when the news of the Australian market came through — where prices were holding barely steady — it gave up most of the earlier gains. Firmer Government Stock rates also continued to put pressure on equities, as yields of up to 14.3 per cent were available on terms of less than two years. The Barclay’s index of industrial shares slipped 0.72 points at the close, to 1859.27 but the more broadly-based NZSE gross index closed up 1.17 points to 683.40. Rises and falls were exactly balanced — un-

derscoring the steady mood. Price changes were very small. Fletcher Challenge, up 4c to 455, had one of the bigger moves. Brierley Investments edged up lc, to 126, but lEP slipped lc to 202. Goodman Fielder Wattie was 2c lower at 283. Banks were all easier and newspaper proprietors continue to be marked down, as investors worry about possible strike action. McKechnie had one of the few double-digit moves, a gain of 21c to 320. Mr Roger Howell, of the Christchurch office of Jordan Sandman Smythe, said that the high level of uncertainty remains the dominant feature of the New Zealand financial markets at present. “This originates from two sources: • the international scene, in which higher interest and inflation rates are keeping world equity markets fragile and nervous. • the domestic scene, where extreme uncertainty over the political

situation in general, and the future of Rogernomics in particular, has reduced the volume of market activity to a low level as market participants stand to one side to await clarification of the likely future direction of Government economic policy. “The Cabinet conference to be held on 14/15 December would seem to be of enormous significance to the markets, and uncertainty will remain high until the outcome of the conference is known. “The foreign exchange market was very dull yesterday with most interest centred on the major offshore currencies, and very little interest shown in the New Zealand dollar. There was little activity on the fixed interest market, and interest rates remain firm with the November 1993 Government Stock trading at a yield of 13.76 per cent, which is up considerably from the low of 12.65 per cent a few months ago, Mr Howell said.