BSI sheds premium

Press, 7 September 1989, Page 24

BSI sheds premium

The Barclays share price index contract (BSI) for September was heavily down yesterday with the premium to the physical vanishing to become a fractional discount. One Wellington trader said he expected the decline to continue today. “It’s a healthy correction,” he said, but over-all the bull market is not under threat.” Influenced by the fall in world stock markets the BSI sifed 69 points to close at 2408. The physical index dropped to 2408.62. One element of the selling was the players who had taken speculative long positions. The trader said 2380 looked to be the September BSl’s next major support level and 2300 after that." Both the interest rate contracts closed bearishly with the short-end especially weak. They were being pressured by the continuing cash play which was keeping money rates up. “It’s the National Bank up to its old tricks,” said the trader. The bank was setting the rate for corporates next week and wanted a high call rate to fix it against. In Sydney the September all ordinaries share price index contract closed at 1794, paring back the premium to physical.