MARKET COMMENT First tier demand pushes index to record 1967.49

Press, 8 February 1986, Page 22

MARKET COMMENT First tier demand pushes index to record 1967.49

By

ADRIAN BROKKING

Four successive rises on each of the four trading days this week — shortened by the Waitangi Day holiday — saw Barclays’ index of industrial shares climb to a new high of 1967.49; the previous record was 1960.45, set on January 8.

Much of the action was provided by Brierley Investments, both by its cash injection of $2l million on market for another 8.5 per cent of the Dominion Breweries capital, and by the strong rise in the BIL share price itself, which rose from 695 c to 745 c during the week.

Acceptors of the bid rushed into the market to re-invest, and people seemed “a little desperate” to find the scrip they wanted, with the result that the shares in the “top tier” were bid up strongly on small volumes.

During the week Brierleys also got approval to increase its holding in NZ News, the publisher of the Auckland “Star” and the Christchurch “Star,” five other daily newspapers as well as a stable of magazines and community newspapers.

Brierleys has appealed to the High Court against

a Commerce Commission decision refusing consent to the take-over proposal. The Court, In reversing this decision, said in its judgment that Brierley’s 40 per cent shareholding and its three directors on the NZ News board already gave it effective control.

But the Court imposed some conditions: editorial independence must be maintained, advertising services must be provided without discrimination, and these policies must be conveyed in writing to the staff and confirmed from time to time.

Stags in Capital Markets had a field day when the shares got listed. Although the opening price of 300 c had a air of artificiality about it — a “made market” — the shares settled well above tlie 150 c price mooted by many brokers before the listing. Capital Markets is the listed arm of Fay Richwhite, the Auckland merchant bank intending to specialise in international finance — interest rate exchanges, sophisticated debt arrangements, and international capital transactions.

The new company was created from Horizon Oil

Exploration, utilising its tax losses, and made the 20 largest New Zealand listed companies by market capitalisation. At the time the Capital MarketsHorizon arrangement was announced, Horizon shares sold around 60c; however, only two months before that they could be picked up for as little as 17c, so some lucky punters made a tidy capital profit

Company news was scarce during the week, but most of it was good: only two companies, Clearwood and NZ Marine Farms, reported losses, and these were in line with prospectus predictions.

McConnell Dowell Corporation’s Australian subsidiary — formerly Acrow Australia, Ltd — more than doubled its interim profit in the six months ended December 31, from sAust322,ooo to $ Aust 7 2 8,0 0 0 ($NZ948,290).

The directors said that they were confident that the second half would be better than the first. The one-for-one rights issue was fully subscribed, and the group has expanded with the acquisition of a Brisbane civil engineer,

Bondor Manufacturing Pty, Ltd. BNZ Finance announced a 1:5 bonus issue, “in view of favourable results for the nine months ended December 31,” the directors said. They expect the profit for the full year to show a significant increase over last year.

Newmans Group sold its Transport (North Canterbury) Holdings stake of 20 per cent to Southern Cross Enterprises for $1.3 million. This company, which already owned 38 per cent of TNC, is a subsidiary of an Australian investment company, Van Berg Pty, Ltd. NZ Salmon jumped from 660 c to 820 c after a “tip,” only to fall back to 760 c yesterday. The company announced during the week that it had placed for cash 800,000 shares with institutions. NZ Marine Farms, the other salmon company, dropped from 160 c to 148 c (after losing 8c on the previous Friday), but ended the week at 162 c. It announced a $793,000 loss for the first nine months of operations — in line with the profit projections in the prospectus.