SHAREMARKET Price fall on low volume good sign?

Press, 29 August 1989, Page 24

SHAREMARKET Price fall on low volume good sign?

The sharemarket continued its correction yesterday, the Barclays index falling 15.04 points to 2340.7 on volume down on the surge of this month. (Turnover was 7.76 M shares for a value of $12.7M). However, rises pipped falls, 26 to 25, as some of the secondary issues continued to rise, such as Waitaki Industries, up 5c to 60, compared with 47 at the beginning of the month. New Zealand Salmon rose 1c to 60. It is up 16c, or 36% in a week. The climb began last Tuesday with news that N.Z. Salmon had made a placement of 5.5 M shares at 45c.

The Bank of New Zealand topped the turnover, 1.35 million selling for a total value of $1.58M. The announcement that the acceptance level of the rights issue was 98.7% did no harm. (The issue was a seven-for-10 cash issue). Mr Tim Preston, of Hamilton, Hindin, Greene, welcomed the continuing lull. The fact that volume was down with the correction was a good sign, he suggested. Buying interest increased late in the day, another good sign. Mondays are generally quiet in the money exchange and sharemarkets, with American and European markets still to wake up from the week-end. This morning will give an interesting indication of the market’s direction. Wall Street’s performance overnight should set the scene. On Friday (early Saturday, N.Z. time), Wall Street eased 2.28 points down on the Dow Jones index, but during trading it reached a record 2748.10 points. Fletcher Challenge eased 2c to 540 on sales of only 175,200. Main interest early in the day was the

movement of 864,000 Brierley Investments (BIL) shares, including five large parcels over 100,000 shares, with the last sale at 240 c. This was the price to which BIL fell by 6c on Friday, after BIL announced on Thursday that Sir Ronald Brierley was to step down as chairman. Cardrona Ski Area rose 10c to 85c on the sale of 1000 shares and Waste Management rose 10c to 260 c on the sale of 1500 shares. Shares in Industrial Equity (Pacific), the Hong Kong-based Brierley offshoot, closed 8c up at 350 on sales totalling 429,600. Brierley Investments, Ltd, the parent company, lifted its stake in lEP to 69% in November, and there is speculation that it is planning to mop up minority interests. Mainzeal Group, of Auckland, which recently lifted its holding in the Mair Astley Group, of Christchurch, to 44%, rose 2c to 54 on the sale of 895,216 shares. Mair Astley eased 5c to 170. It was at 210 earlier this month before announcing a loss would be reported for the full financial year. Fernz Corporation, the chemical and fertiliser manufacturer, eased 25c to 660. In its big run-up from 452 c since the beginning of July, it passed 510 c at the beginning of this month. Fernz’s gain for the month now stands at 29.4%. A sizeable parcel of the tightly held Cavalier sold at 190 c, down 2c. Cavalier thus eases to being a mere 123% above its price at the beginning of the year.

Wilson and Horton eased a further 5c to 820 after peaking at 855 last Tuesday in its run-up from 727 this month. Independent Newspapers eased 10c to 550 from its peak of 560 on Friday. At the beginning of the month it was at 440.