Kiwi takeover tumbles

By Campbell McIlroy

Friday 14th September 2001

As global markets felt the aftershocks of terrorist attacks in the US, three potential takeovers in New Zealand were postponed.

Market speculation suggested Tranz Rail, Tower or Natural Gas Corporation would be targeted for takeover this week.

All plans were put on hold in wake of the events in the US.

Early panic selling on international markets saw falls of 3-8% on Wednesday. But European markets rallied on Wednesday night with the UK, German and French markets rising 2.8%, 1.4% and 1.3% respectively.

Many US shares have dual listings in London which should have given investors the chance to short stocks and protect themselves.

Analysis of historic US market reaction to a crisis shows a mean fall of 7.1% the day after with a 3.8% recovery after 22 days.

While the productive capacity of the US economy has not been hit, it is difficult to predict the psychological effect on the US markets.

Comments from our readers

No comments yet