Exchange views ‘uncertain’ year
The investing public and the finance industry are unlikely to look back favourably on the last 12 months, which produced the inevitably severe after-shocks of the October, 1987, crash, the chairman of the Christchurch Invercargill Regional Stock Exchange, Mr M. C. Mathias, told the annual meeting yesterday. “The market, as measured by the NZSE Gross Index, suffered a substantial second fall through November/February which compounded the initial October 20 collapse, and for the remainder of the year has traded in a narrow band around the 700-mark.
“Uncertainty would sum up the outlook of the professional and private investor,” Mr Mathias said. The first three years of the Labour Government provided an environment for business when for the first time in many decades they could operate with a degree of certainty. Alas, the last 12 months has seen chopping and changing which has unsettled many of their admirers.
“The individual components that have been the cause of the problem have been well chronicled in the media, but suffice to say that until the entire political scene settles
down, few serious supporters of equities are likely to ‘chance their arm.’
“A decision on the future course of superannuation in this country is desperately required. The first wave of the ‘baby boomers’ — which will make up an increasing proportion of the population from the year 2000 onwards — have reached their early 40s with many now in the position of being able for the first time to look at funding their retirement. Regrettably the months tick by and the individuals, unless gingered into action, are becoming more and more laissezfaire in their approach. A viable superannuation policy would create strong support for financial markets.
“Canterbury and the South Island have faced a difficult period of restructuring exasperated by the rural scene, first savaged by the recession and the high dollar/interest rates, and now through the drought. The effects of this have yet to filter through to us city slickers. Allied to this the failure of local companies has led to a despondent local investment scene compounded by the problems in the Christchurch C.B.D. property market. “Hopefully, out of all
this there will develop a more resilient local economy with ambitions which will not be totally inhibited by the frustrations of the last 12 months,” Mr Mathias said.
“It should be recognised that the collapses locally have been of essentially smaller companies and that there are a greater number of viable local concerns which are progressing forward and contributing to the Canterbury economy.
“Investors in the New Zealand market will have happily noticed a Vast improvement since June in the flow of documentation. The introduction of a sophisticated and inevitably expensive industry settlement system has seen all but a minuscule number of transactions cleared within a month of the date of the contract. The market has managed to absorb the excesses of the boom years in reasonable order and although it lies dormant it is in good shape for the inevitable upturn. The question of course is when will this occur? Mr Mathias asked. The members of the exchange checked the following committee: Mr M. C. Mathias (chairman), Mr J. P. G. Egden (vice-chairman), Messrs M. H. Piper, H. J. Taylor, J. R. Wignail, G. S. Wilkinson.
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Press, 7 December 1988, Page 46
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546Exchange views ‘uncertain’ year Press, 7 December 1988, Page 46
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