Brokers see correction soon

Press, 8 February 1986, Page 22

Brokers see correction soon

“Yesterday was as if there had been no holiday on Thursday,” said Mr David Dott, of the Christchurch sharebroking firm Chamberlain, Sturge and Company. “Investors continued where they left off on Wednesday, making a strong market — the sixth day in a row. Brierley Investments again led the way, and its $2l million bid for Dominion Breweries shares provided the impetus. Fletchers and NZ Forest Products were in demand, but NZI Corporation missed out this time — no doubt because its cash issue is casting a shadow.

“We would expect the market to quieten down a bit next week,” Mr Dott said.

Mr Jonathan Tushey, market operator with Francis Allison Symes and Company, Wellington, said that yesterday’s market sparked oft by increased corporate activity, was again very firm with all leaders well bid.

“There were a number of keen buyers for INL, which

closed at 450 c — well out of reach of the Jarden bid. Jardens were still among the buyers. There were overseas orders for NZ Forest Products and Fletchers, but some areas of the market gave the appearance of panic buying, and it should not surprise if there were a correction next week. However, over all sentiment is still bullish,” Mr Tushey said. Mr Brian Kreft, of the Dunedin broking firm Forsyth, Barr and Company, said:— “The forward movement in share prices gained momentum on Wednesday and Friday and it appears it will continue into the early part of the coming week. Buying has been concentrated in the Investment/Finance/ Banking sector as well as spilling over into the Property and certain industrial stocks such as Fletcher Challenge, Goodmans, and Carters.

“Next to the listing of Cinderella stock, Capital Markets, the announcement

that Industrial Equity Pacific is to list in New Zealand has played a part in the increase in Brierley’s share price which has, in turn, increased the over-ail share index. However, with the concentrated buying of leading stocks the over-all increase in the index must be considered satisfactory if not a little ahead of time.

“Tradition may change this year as about this time selling pressure to meet tax and other funding commitments due in the month of March normally takes place but there is little or no evidence of this to date.

“It is a very difficult market to trade in and investors should, in my opinion, continue to maintain a cautious approach and continue readjusting their portfolios to make way for overseas holdings particularly in the Australian market The outlook in that market over the next 6-9 months appears to be better than that of the domestic market Reports coming

out of Australia that such stocks as Adelaide Steam, News Corp, and F.A.I. warrant close Investor attention.

“Since the Christmas period the two-tier structure of the New Zealand market has now clearly established itself, with trading continuing to be thin in the second tier. In the coming week we should see prices continuing to rise with the inevitable correction taking place later in the week.

"Attention will continue to focus on Brierleys, Chase, Equiticorp etc., and other special situation stocks such as the Salmon stocks. New Zealand Salmon has tended to overshadow New Zealand Marine and as a result that company may still be underpriced in this market Omnicorp while suffering from being rebuffed in its attempt to get a toe-hold in Endeavour is still being overlooked by the investing public, and may warrant a second look,” Mr Kreft said.