BBC record

Press, 2 June 1989, Page 15

BBC record

A record $6OO million of bank bill contracts (BBC) was traded on the New Zealand Futures Exchange yesterday.

A total of 1219 contracts were traded, 123 more than the previous record set on 1 May last year. Each contract has a nominal value of $500,000, the exchange said.

One dealer attributed the high volume to the approach of the June closeout, and also clients attempting to gauge what the gap would be for the September contract between futures and physical interest rates.

The June gap had narrowed in the last few sessions, the dealer said. The exchange’s marketing manager, Mr Lincoln Gould, saidthe BBC, based on 90-Day bank bills was designed specifically for offsetting the risk of short-term interest rates.

The exchange had been concerned for some time that, in spite of volatile interest rates, the contract has been poorly traded. This could indicate simply a lack

of understanding of financial risk management among institutions.

“Today's record volume will need to be sustained, but it might indicate that a change is taking place.”

The Barclays share price index (BSI) contract recovered some lost ground, although coming off its early highs as the Australian sharemarket eased. The premium against the physical rose to 10 points from 2 points on Wednesday, as the lower cross-rate against the Australian dollar brought some relief from the downtrend. The Magnum 125 c a share special dividend was still holding sway over the BSI as its ex dividend date of Wednesday approached, the dealer said.On the Sydney Futures Exchange, the June share price index contract closed lower at 1534 after opening at 1539 from Wednesday's 1541 close. About 1162 lots were dealt.

Details of yesterday's trad ing were: