Life (And The Market) Must Go On, No Matter

Press, Volume CVI, Issue 31096, 27 June 1966, Page 17

Life (And The Market) Must Go On, No Matter

“Life must go on,” someone always says whenever there is a crisis, and life always does go on. The share market in New Zealand is taking notice of this trite old adage and is going on.

Brokers and investors settled down last week to trading with no overseas stocks being chalked on the boards in line with the stock exchange edict to halt this business until Budget restrictions have been more fully defined.

Last Monday’s talks at the Reserve Bank have been inconclusive so far—-although it was expected some announcement would be made before the start of trading on Tuesday —but brokers are still hopeful that something can be done.

Hardest hit by the Budget are those brokers who were doing a substantial amount of business on the “other market.”

On the Stock Exchange itself turn-overs seem to be only slightly down in a market searching for new levels in trading. Turn-over on the Christchurch Stock Exchange has held up pretty well and the daily average for the week of 17,500 compares with 20,300 the week before. Market Pressure There was a sharp drop in sales on Wednesday in Christchurch, but this was probably caused by external forces rather than market pressures. The suspension of trading in overseas shares drew comment from newspapers in Australia and Britain.

“The Times" City Editor said the suspension had “effectively ended the sizable grey market which has developed in New Zealand currency.” However, he was optimistic that the suspension might be only temporary. Optimism Stock exchange circles were also slightly optimistic last week that some easing of the ban on trading in overseas securities was likely. Nevertheless, it is felt that some kind of restriction will continue, at least for a while, even if there is some modification by the Reserve Bank of the Budget measures. There have been plenty of rumours in stock exchange ] circles and lots of suggestions ihow trading in overseas stocks lean be resumed. I In the middle of the week it was said that dealing in overseas shares would be permitted again, but the premium would not be allowed to exceed 3 per cent. It has also been said that the Reserve Bank would open a New Zealand register and that all overseas shares held in New Zealand would be registered. Registration The suggestion was that once shares were on this register it would be possible to trade them freely in New Zealand with all transfers being marked. After last Monday’s talks a standing committee was set up to continue discussions with the Reserve Bank.

On Saturday the New Zealand Stock Exchange Association made the statement that these negotiations would take some time.

“The complexities of the operation particularly the need to avoid the securities market being used to divert overseas funvs from the official

reserves, make it obvious that completion of these negotiations will take some time,” the association said. Obviously effort should be c-ncentrated on restoring the right of genuine investors to trade in overseas securities on the stock exchange. New Zealand stock exchanges have still to set the date for the change to an alphabetical quotation list Alphabetical It took quite a while for the decision on the change to be made, but there is no reason why there should be any delay in taking out the categories and shuffling the list into alphabetical order, Late in March the chairman of the Auckland Stock Exchange (Mr M. P. Hay) said his exchange had already decided to change and that the official record, produced in Christchurch, would also have alphabetical listing. This could not be confirmed locally at the time and it seemed Mr Hay had “jumped the gun” on the announcement about listing. Now the decision is official for all exchanges categories will be taken out of the list and shares will be in alphabetical order. But there will not be the telephone directory listing of the Australian exchanges. Instead companies will be listed under their registered names. G. J. Coles will be under G and not under C as in Australia. Australian Some investors have found the Australian list confusing when looking for a few of the older-established companies.

To them it still seems a little strange to find Howard Smith listed as Smith, H. Newer companies fit more gracefully into telephone directory listing and it seems this is the better way for planning ahead. Sydney Stock Exchange had other considerations when it changed to alpha-

betical listing soon after adopting post trading. Besides being in categories the trading board also had a list for key stocks. Brokers used to cluster around the leaders board, leaving the rest of the trading floor as empty as the concourse of Sydney's Central Station at 2 a.m.

They also used to gear the market to the key stocks and the one section of the list set the market trend. By sprinkling the leaders through the list the exchange keeps the brokers moving and helps set a better trading pattern. Categories These days investors think more widely than in the past so the move away from a categorised list is another step towards modernisation of New Zealand stock exchange practice. Week-end news that there was some sign of agreement between ship owners and striking British seamen gives a slightly brighter prospect. Already the strike will cause considerable disruption to New Zealand’s economy and it is to be hoped that the dispute will end this week.