Prices off lows, but still down

Press, 1 March 1989, Page 40

Prices off lows, but still down

The New Zealand share market lost more ground yesterday, but closed oft Its lows. It opened on a very weak note as it came under exchange rate pressure, as the Australian dollar fell 3.5 c overnight. This weakening of the Australian dollar against the U.S. dollar helped push the cross rate against the local currency to Aust7Bc yesterday morning making New Zealand stocks much dearer across the Tasman.

There was no big selling pressure on the New Zealand market, as shown by thin trading volumes reported by the Stock Exchange. The Barclays industrials index closed 8.76 points down at 1891.73, largely the result of a slump by food giant Goodman Fielder Wattle, which closed 14c easier at 246, after the release of a sharply lower interim profit on Monday.

Goodman’s $lO7 million result for the six months ended December 31 was 18.5 per cent below the profit for the previous comparable period. The company is New Zealand’s second largest by market capitalisation and as such has a significant weighting on the Barclays index of the top 40 companies.

Goodman’s influence on the Barclay’s was highlighted by the broaderbased NZSE gross index, which closed up 0.88 point at 702.89, having been 6.2 points lower at midsession. In the afternoon local institutions

began buying at the lower prices. Falls just pipped rises, in lacklustre trading as only 6.0 million shares changed hands for $9.6 million, an average of 159 c a share. Mr Tim Preston, of Hamilton Hindin and Greene, said that the market opened again on a weak note yesterday morning, “but looks terribly oversold.” “There is strong underlying support, as evidenced by the good performance of the market in the face of a number of negative factors such as adverse exchange rates and rising interest rates.

“It should not be surprising if we were to see a substantial upwards correction in the near future,” Mr Preston said. “This would be helped by some good results to come, among others from Fletcher Challenge and Brierley Investments.” Among the leaders, Fletchers at 512 and Brierleys at 151 both edged up Ic, while Rob Jones Investments and Capital Markets also sneaked 1c each, to 97 and 117 respectively. Rises of 2c were posted by Elders NZFP, at 318, LWR Inds, at 122, Smiths City Group at 57, and Ceramco at 132.

I.N.L. firmed 3c to 388, while Pacer Kerridge, at 33 and NZ Leathers, at 103, also rose 3c.

Magnum gained 5c to 410, and Mount Cook Group had one of the two best rises of the day —10 c to 155.

Most falls were small: Chase lost 2c to 51, Waitaki also eased 2c, to 18.