Speculation on list price of Capital

Press, 31 January 1986, Page 10

Speculation on list price of Capital

PA Auckland Capital Markets, Ltd, the new investment firm backed by an Auckland merchant bank, Fay

Richwhite, will list on the Stock Exchange early next week, probably on Monday. All the share certificates representing the exchange for Horizon Oil Exploration, NL, have been sent out.

A Fay Richwhite spokesman said: “We are not very far from listing. It’s just the paperwork that needs to be completed to comply with the Stock Exchange regulations, and that takes a while.”

BNZ Share Registry staff worked during last weekend to complete the allotment and shareholders who accepted the Fay Richwhite offer by the end of December will now have received the certificates, either for options or head shares.

Interest now centres on the listing price of Capital Markets. When trading in Horizon closed before Christmas the ordinary shares finished at 80c and the options at 50c. This suggested that Capital Markets would open at around 220 c for the ordinary shares.

But since then there has been some off-market trading, with the Horizon price rising to 105 c and 85c. On these figures,

Capital Markets ordinary shares could list near to 300 c and around 200 c for the options. Built in to this 300 c price will be a fair amount of public expectation of the Fay Richwhite ability to perform. Part of the public expectation may hinge on the fact that it sees Capital Markets as an investment company, with entrepreneurial skills.

Fay Richwhite has entrepreneurial ability, but Capital Markets, a finance company, will rely on credibility and established reputation, especially when acting in the international financial markets.

Capital Markets will therefore act more conservatively than the upfront, aggressive investment companies.

Still, a listing at 300 c will undoubtedly bring out the stags in the first week and they can expect a good, early profit from selling their Capital Markets shares.

Capital Markets, with shareholders’ funds of nearly S6OM, will complement the existing merchant banking operations of Fay Richwhite. The company will eventually seek listing in Australia.