INVESTMENT

Evening Post, Volume CIX, Issue 88, 14 April 1930, Page 14

INVESTMENT

'.' " BEARISH " INFLUENCES

.STATE OK SYDNEY MARKET

.!';■* ' (Received 14th April, 11 a.m.)

SYDNEY, This Day

ivV'Share prices receded sharply on'Chango '■' Vduring the past week, and the market sufSi'ered further by declarations of reduced frdividends. The most surprising instance sipt this is afforded by the Queensland Na;;'tional Bank's announcement, that its quarterly distributionwill be lowered from tho ;;.;,rate of 10. per cent, per annum to 8 per fXcent. The shares of the bank immediately ('dropped 25s to £6. "' '

This macks the fourth bank operating in Australia to adopt such an action with,ln the past few months. Many trading * and industrial concerns, taking their cue from the banks, have similarly told tKeiiVshar.fihold.ers that the financial icsources must be conserved. Fastoral * companies'' stocks and shares generally have not been greatly in request. , -The Federal Government's drastic action in restricting imports has not had any appreciable direct effect on the prices of shares of the great public retail: drapery - organisations. In view of the prevailing depression and lessened popu]ai purchasing :. power, .■ investors are inclined to hold off from "movie phares, which are now -losing -in favour ' owing to reduced earnings and the announcement of a low.er dividend by. one of the larger"companies. i Th§ problem facing the investment mar- * jket in- all cases is what the future divi- ' dendsfare likely, to be. The capital securltv.'^ff cours.e, also has to be considered. Government loans remain firm, partly as a'Tresiiltrof, the success of-the recent ' Commonwealth:- conversion issue.- Only £18,000,-000-is left to be covered in'this Ibdiithis calendar' year; and the task is not regarded as likely to involve; any great difficulty. ■",':':^;'. ' '; "

fwv'.The loan referred to in the:above cable- ; jgi'am is the 6 per cent. Commonwealth •"-iGovernment Loan, falling due lSth-Decem-.■Ab'er next, and is for over £61,914,000. This r-o-ith £10,750,000, which fell due on 15th ,'',";Mareh of this year, made a total as at the .'.end of last year of £72,665,000 in all to be Vdealt with during the present year. The ' V.ten million loan was more than met by • /.payment and conversion at due date, and £61,914,000 obligation has also been ~Arranged, for*excepting some £18,000,000, '..which in any .case is not due until the end ■'-of this"'year,'and which, no doubt, will [~ be provided for in ample time for cash or .% Conversion on 15th December next. With to the Queensland National Bank's '-'dividend, it would appear that its reduc','tibn may be attributable less to any off in profits than, pursuit of a impolicy;.of still further strengthening financial resources, a policy pursued by other . jianks ftrading'in Australia and New Zea/]ahd. The banks will be included among , Jthe larger" subscribers or converters, in re<i.«ent Commonwealth loans. i .'. The Queensland ' National Bank's year vends 30th June, "but its dividends are paid v and f!or some years past have :'/been 2% per cent, per quarter, or 10 per .'Ocent. per annum; Profits last year were ;C£202,385, after^yriting off. £10,000 on bank ■^premises. Reserves stood at £821,059 at ;;'lst July.last:-The dividend at the rate i'of 10 per cent. per.annum required £ 174,C 997. Total assets of the bank to its pub- : lie liabilities :at 30th June last were 157.7 jper cent. ~..