SHAREMARKET Magnum loss puts indices down

Press, 25 May 1989, Page 37

SHAREMARKET Magnum loss puts indices down

The weakness of overseas markets spilt over into the New Zealand sharemarket yesterday, but most of the damage was done by the 25c fall in Magnum Corporation Shares, which was entirely a local affair. Magnum finished at 415 after the company announced late on Tuesday that it would pay a special 125 c a share dividend. Trading in the stock was relatively light, with 221,100 shares changing hands.

Brokers said Magnum eased because tax was payable on the dividend. But Brierley Investments, the 72 per cent shareholder in Magnum which will be the main beneficiary of the payout, closed 2c firmer at 164.

The Barclays index of industrial shares fell 13.79 points to 1933.90, while the NZSE gross index dropped 5.58 to 711.63.

after being down 4.53 points at noon.

. Falls outnumbered rises three to two, as 9.6 million shares changed hands for $17.3 million — an average of 180 c a share.

Mr Kerry Foster, of the Christchurch office of Forsyth Barr, Ltd, said that situation stocks dominated market trading yesterday. “Most attention focused on Magnum Corporation,” he said. “The company indicated that it was no longer able to earn a satisfactory rate of return on these funds and had decided, at the instigation of Brierley Investments, to make the payout to shareholders.

"In response, Magnum shares fell 25c as investors reassessed the likely earnings prospects and prospective dividend yield for the group. “Brierleys, the major

beneficiary from the move, firmed 2c. "Goodman Fielder Wattle continued to attract interest as solid buying support resulted in 3 million shares changing hands. This support reflects that the market is more comfortable with the company’s balance sheet ratios,” Mr Porter said.

Lion Nathan, another liquor stock, followed Magnum down, and finished 9c lower at 313, on low volume. Stocks listed in both New Zealand and Australia lost ground Fletcher Challenge lost 4c to 486, Elders NZFP 5c to 255, and NZI Corporation shed 2c to 53.

The Barclays share price index futures contracts dropped sharply, the June contract by 23 points and the September contract by 40 points.