THE MONEY MARKET.

Ashburton Guardian, Volume XLVII, Issue 10826, 22 January 1927, Page 6

THE MONEY MARKET.

SPLENDID TONE PREVAILS. BANK SHARES VERY FIRM. •» " THE WEEK ON ’CHANGE. (Written for “Guardian.”) (By “Investor.”) Probably few people expected .tlirit tlie Stock*Exchanges of the Dominion would be so active at this early stage. The volume of business passing, is heavy, and the general tone of the market is splendid. The banking group is exceptionally firm, and prices have advanced in a marked manner m several instances. Naturally, the advance has had the effect of steadying, the demand, but there is reason to believe that possibly the majority of the sales going through are not being reported. , Taken on the whole, the Government section has been fairly' steady’. Buyers are half-a-erown below their quotations for tax-free issues of last week, but those giving a higher yield have improved a little. The 1938 and 1939 per cents., both bonds and inscribeds. have sold at £96 15s, and inscribeds could be obtained at that figure at time of writing; but for bonds sellers are asking £97, with buyers ten shillings away. For the 5i per cents. £lOl lias been the ruling price, and several sales have gone through. For 4} per cent, bonds, 1930, £97 10s has been paid. Australian Bank Shares. The demand for .Australian bank issues is strong. Buyers have advanced their offers for New South Wales by 56, and for Unions by 4s 6d. For the former, £47 and £47 2s 6d have been paid during the week, and for the latter £ls 6s 3d and £ls 9s 6d. In the north there has been activity’ in Australasias, with sales at £l4 2s 6d and £l4 3s 6d. Christchurch has reported business in Western Australians at 54s 6d, and more could be obtained pt that price. Looking over the Australian banking lists, I was struck by the fact that the Australian Bank of Commerce is about the only banking institution paying under, 10 per cent. Its rate of dividend has been 8 per cent. But this bank recently announced’ that in tbe course of the' next few months it would pay off. the balance of the inscribed deposits. Before the war these deposits amounted to £1,673,000, and most of the holders have since taken advantage of an offer to turn their holdings into shares at the rate of two fully paid-up shares for every £3 of . deposits. The capital is being increased, and tbe premiums will be added to reserves, thus bringing tbe total over the £1,000,000 mark. Last year the net profit was £207,943, and l the dividend accounted for £147,200 of that sum, leaving a balance of £60,743. With added capital at its ' disposal, and the prospect of a prosperous year in Australia, the probability of this institution increasing its dividend to 10 per cent, must be taken into account. The next dividend is payable in July, and tiie trend of tbe market may give an indication before then. I can say r that the prospects are having attention by shrewd investors.

A fair amount of business in New Zealands has been recorded, three of the Exchanges reporting sales, without exception all at 595. There are buyers at that price, with a margin of only 2d separating them from sellers. The only sales of Nationals were at £7 3s and £7 2s 6d, and they were in advance of closing offers last week. . Insurances Continue Active. The activity in the insurance group continues unabated. The fact that New Zealands remain unchanged shows how fully the expected dividend was anticipated in the transactions. They have sold at 37s 6d in most centres. Nationals have been prominent with sales at 74s in Christchurch and Dunedin and at 74s and 74s 6d in the north. At time of writing 74s is the middle quotation, twopence either way. South British have changed hands at 56s 9d and Standards at 57s 6d. Compared with other sections the brewery group lias been quiet. New Zealands, bonds have been sold at 24s 6d and 24s 7d in Christchurch and at 24s 9d in Wellington, while the shares have been dealt in at from 52s to 52s 9d. Auckland reported a sale of Crowns at 21s 6d but there are sellers at 18s 6d at time of writing. The only sale of Staples reported was in the south and 39s 6d was the price paid. In the miscellaneous section the outstanding feature of the week was the announcement of the New Zealand Refrigerating Company that the directors could not see their way to recommend the payment of a dividend. Naturally the shares have receded in price, the eonts. having changed hands at from 6s to 7s 4d. It should be noted that while the amount carried forward is £7.400 less than what was brought in, that was after writing over £12,000 off the interest in shares in the Wanganui company—fully one third. The company could have paid the dividend declared a year ago and have carried forward about £20,000, but the directors have decided to conserve the financial resources of the company rather than distribute them in the form of dividends. It would not be- at all surprising if the shares made a recovery at no distant date. The market is a very sensitive thing, and often the fluctuations are too great. Last year the formation of a new cement company in the north depressed Wilson’s Cements. Buying quotations fell from 35s Id to 30s lOd in a month, but they are back to 24s lOd now, having advanced during the week. The quotations for Refrigs, may fluctuate but an advance would not be at all surprising. Other Business. Christchurch Gas have been in keen demand in. expectation of a favourable balance-sheet. Sales have ranged from 25s 6d to 26s and more could be placed at the higher figure. As stated W ilson’s Cements have improved. There have been sales at 35s to 35s 1-Jd in Christchurch, and 35s in Auckland, and at 3os 6d in the south. Auckland reported a sale of Colonial Sugars at £55 15s but offers of that price since have met with a request for £56 15s. British Tobaccos have been dealt in at 52s 6d and 52s 9d, a substantial advance on last week’s closing offers. Of other issues the greatest activity has been in the rights of Milburn Lime and Cements which have changed baud-; at prices from 2s to 3s lid. Kawarau have been most prominent

in the mining section), prices ranging from 3s 7d to 3s 9d. There was a sale cf Mt. Lyells at 38s and Electrolytics (ord. mint, div.) have sold at 36s lOd and 37s lid.