SHAREMARKET Goodman Fielder dominates sales

Press, 27 April 1989, Page 44

SHAREMARKET Goodman Fielder dominates sales

Large numbers of Goodman Fielder Wattle shareholders are completely ignoring the advice of their directors and are selling their shares as fast as they can. Yesterday GFW accounted for $B6 million of the $lO5 million total turnover on the New Zealand Sharemarket.

Much of the remaining turnover was the result of funds being reinvested after GFW shareholders had sold to Ranks Hovis McDougall.

The sharemarket eased yesterday, after Monday’s 90 point jump in the Barclays index when Rank Hovis* launched its scoop on Goodman Fielder.

The Barclays lost 7.76 points to 1956.87, while the broader-based NZSE gross index was up 0.11 points to 714.80. Falls outnumbered rises four to three. Goodman Fielder slipped in the afternoon session, after Ranks Hovis said it had reached its initial target of 14.99 per cent of the company’s capital. Most of the shares were bought on the Australian exchange with more than 40 million being crossed there in the first hour of trading.

Goodman Fielder closed the day 10c down at 312 on the local market. Brokers told NZPA that the stock had been

forced down by an abundance of sellers.

They said the Ranks Hovis bid was seen as being unlikely to succeed, so . Goodman Fielder shareholders had sold out while they could. Although most of the sales of Goodman shares were by institutions, brokers generally appear to believe that the bid will not succeed, for two reasons. One, that people close to the company own 30 per cent of the stock, and supportive institutions hold another 20 per cent. Two, that it is thought that Goodman could use its 30 per cent stake in RHM to curtail the offer at board level.

Mr Michael Sidey, Christchurch director of Forsyth Barr, said that on a day when sellers dominated Ranks Hovis quickly reached their target of 14.9 per cent of GFW. On completion the N.Z. and Australian indicies drifted back and closed well off their highs. Shareholders in GFW now wait for statements by the directors of GFW and the attitude of the Australian Foreign Investment Review Board to RHM’s full take-over offer.

With Monday’s excitement gone brokers and investors alike receded into the “business as usual” mode. However, the day was notable for some high turnover

stocks other than GFW — particularly Brierley, Fletcher, Robt. Jones, and capital markets. This may be evidence of reinvestment of GFW proceeds.

“Once RHM had completed the first stage of its take-over the focus in Australia was back on Bond Corporation. The rumblings of concern internationally over this company were responded to by Bond Corporation applying for permission to buy back 10 per cent of its share capital. With the general difficulties facing Australia, a problem within this industrial conglomerate would be of material concern,” Mr Sidey said. The action spurred heavy trading in other leading New Zealand stocks. More than 3.6 million Brierley Investments shares traded and that stock closed 1c easier at 157, and more than 800,000 Fletcher Challenge shares crossed the floor and that stock slipped 4c to 502. Capital Markets slipped 2c to 114 with 1.03 million shares traded. Elders Resources closed 4c firmer at 306 while Carter Holt Harvey was 2c firmer at 234.

The Barclays share index futures contract closed at 1990, a 34 point premium to the physical.