Shares Down For Fifth Straight Day

The Age

Wednesday October 15, 1997

DAVID SAUNDERS and AAP

An anxious sharemarket fell for the fifth day running yesterday as investors awaited the release of economic data from the United States, due late last night.

Brokers said several factors weighed heavily on the market, creating uncertainty and a reluctance to take big positions in the market.

US retail sales figures were due last night, and the consumer price index number will be out tonight.

The data will have implications for US interest rates, and will get special attention in view of last week's comments by the Federal Reserve chief, Dr Alan Greenspan, about the US market's value.

Brokers said the currency crisis in South-East Asia was also having a negative effect on local stocks with export and operational exposure to the region.

Hardest hit was Coca-Cola Amatil, which was routed again. It hit a seven-month low of $11.50 before rallying to close at $11.95, still down 1.2 per cent on the day. The stock has tumbled more than 20 per cent in 12 days.

The currency crisis has also hurt resource stocks as commodity prices fall on concerns that flagging economies will diminish industry demand.

BHP stock, already under pressure because of poor operational performance, reflected these worries. It slid to a three-and-a-half-year low of $15.35 before firming to close at $15.46, down two cents on the day. Rio Tinto, another with extensive global exposure, was off 35.7 cents at $19,90.

National Foods, which also has considerable export interests in Asia, was off two cents at $2.05.

The contractor Leightons, despite its construction interests across Asia, defied the day's trend, rising 13.5 cents to $7.12.

The Telstra float also continued to affect the market, with brokers saying the impact was on volume rather than prices.

The market's other main diversion was the takeover bid for the upmarket clothing and homewares chain Country Road by the South African retailer Woolworths Holdings.

Country Road's shares were suspended during the morning pending the announcement of Woolworth's $2-a-share bid. The group already has a 19.9 per cent stake.

The bid was at a 17.5 discount to Country Road's share price at the time of the announcement. However, the shares ended 43 cents higher at $2.05, prompting brokers to question whether shareholders would jump at the offer.

A 5.8 per cent stake in Pirelli Cables Australia was crossed by County NatWest. Just over five million shares were crossed at 85 cents, two cents higher than the closing price. Brokers speculated that Bankers Trust may have been topping up its stake. Late last month BT increased its holding to 12.69 per cent from 9.79 per cent.

The only sector to stay in positive territory was insurance, which was sold off heavily earlier in the week.

Shares in the building group CSR rebounded again, closing up nine cents at $5.26. One analyst said the company was making the right sounds for the market, although its $400 million writedown of assets on Tuesday was unlikely to endear it to some shareholders.

Investors evidently had little faith in Morgan Stanley's extravagant call on New Zealand's Fletcher Challenge energy shares. A recent market boomer, Fletcher headed south, shedding 14 cents to close at $6.97.

In the gold sector, stocks were mixed after the bullion price weakened again, falling nearly $US1 an ounce.

Shares in the takeover target Wiluna Mines rose a cent to 76 cents. Only 189,000 were traded but the move above a revised bid of 75 cents from Great Central Mining put the ball back in Mr Joseph Gutnick's court. Great Central was off three cents at $2.12.

Elsewhere Normandy fell a cent to $1.85 while Plutonic slipped 15 cents to $3.61.

STOCKWATCH

Henry Walker Group said yesterday it wanted to nail down project work in South America by the end of 1997-98.

"We would particularly like to be in either Chile or Argentina," said the managing director, Mr Richard Ryan.

The contract miner was keen for involvement in Argentina's massive Bajo de la Alumbrera copper project, Mr Ryan said. The mine is 50 per cent owned by MIM.

Rising mining production but falling commodity prices would increase demand for the contractor's expertise in getting prices down, he said.

Henry Walker shares fell five cents to $2.80. -- AAP

MONEY

Profit-taking following rises earlier in the week pushed the dollar lower yesterday.

The currency ended at 73.45 US cents from 73.84, with market suggestions that it had been over-bought. However, traders reported offshore support for the unit.

In contrast, the bond market ended stronger, having fallen on Tuesday. The yield on 10-year paper fell 11 basis points to 6.31 per cent while the three-year rate was also down 11 points, to 5.33.

Dealers said the markets were looking to economic data from the US due overnight and tomorrow, as well as the third-quarter domestic CPI figure, due next week.

IN SUMMARY: Further nervousness ahead of the release of US economic data undermined the local sharemarket yesterday. The All Ords fell nearly 1 per cent to as low as 2640 before bouncing to finish 8.3 points lower at 2653.7. Brokers said the release of US retail sales figures and worries about the implications of the Asian currency crisis were keeping investors away. Wall Street's Dow Jones earlier rose 24.07 points to 8096.28.