MONEY MARKET

Ashburton Guardian, Volume 55, Issue 243, 27 July 1935, Page 7

MONEY MARKET

TRADE FOR PRODUCTION YEAR.

A FAVOURABLE BALANCE.

THE WEEK ON ’CHANGE.

(Written for the “Guardian” by Investor.)

The trade returns for the production year, July 1 to June 30, should have careful attention. The production year is the best basis of comparison, for it covers a complete producing .season, whereas both the calendar and the financial years make a summary division. The position disclosed is that we had a favourable balance, —that is, a surplus of exports over imports—of £22,439,000 in the year 1933-34, and that this had fallen to £8,652,000 in 1934-35. Now it lias been estimated that the Dominion must have a surplus of about £9,000,000 to meet State and local body commitments overseas so that apparently we have not balanced the account. And there are invisible items that must he taken into consideration. The change has been caused by increased imports to the value of about £7,600,000, and decreased exports a drop of about £6,200,000. The imports have grown steadily', because business firms, must replenish . stocks, and it will probably be found that the drop in the value of wool lias beep, largely responsible for the fall in exports. However, the Dominion possesses, in the Reserve Bank sterling exchange holdings,, ample London funds, and it is really interesting to note that these additional imports appear to have been financed without lowering to any extent the London holdings. We have been told that some of the trading banks have been transferring funds to London, so that they would not be likely to purchase bills on New Zealand to any extent Dearer Money Indicated. Those concerned in the money market should take note of the fact that rates appear to be hardening in Australia, and the Dominion often follows in the wake of its big neighbour in this respect. The result of dearer money would be to lower the market price for fixed-term investments, such as Government, and local body loans, and a correspondent in Melbourne informs me that careful investors there are considering the transfer of funds from these loans to banks and good industrials where there is a prospect of better returns find a rise in values. The Government section this week has not been active, and in five days Christchurch, for instance, reported only one transaction. Prices are steady. The banking section. is definitely firmer, and it would not be surprising to see the trend continue. The quarterly averages published in Australia show that advances have increased so that the earning power of the banks must have improved. Commercials sold from 16s 9cl to 17s cum div., and buyers stayed in at the highest point. E.S : . and A. offered last week at £5 3s 6d, sold at £5 5s 6d, while the paid issue of Nat. of Australasia have buyers 3s 6d up at £l3 Is, and the £5 paid shares sold to £6 10s. Last week New South Wales were turned over at £3l 15s, and this week had business and buyers at £32 15s. Unions cum div. sold at £9 2s, and Reserves at £6 9s 3d and £6 9s 6d. The market is firmer all round. Insurances in Demand.

Insurances also have been in demand. Nationals had sales and sellers at 20s lid, and Standards touched 735. Buyers of A.P.A. went to 225, but sellers asked 1/- more. Dalgetys went from £8 5s to £8 2s 6d and £8 3s, and Goldsbrough Morts jumped from 30s Id to 31s 4d, and nave buyers at 31s, against 29s lOd a week ago.

The shipping market has not been active, but a sale of New Zealand prefs. at £ll was interesting. They do not come on to the market often. ' Kaiapoi Woollens continue in strong demand. The ords. sold at 16s 3d and 16s 6d.

Breweries have not altered much. Timarus (7s 6tl paid) have been the most active, and it is interesting to note that the sales on these shares in Christchurch alone this quarter have aggregated nearly 5000. Tire price went from 9s to 9s 3d, and sellers are holding for an additional penny. New Zealands eased from 53s 4d to 53s Id, and both Staples and Tooths came back a little.

Meat shares are steadily firm. Canterbury prefs. sold at £6, the N.Z. Refrig, paids at 20s 10d, and the partly paids at 9s lid. The large scope of the miscellaneous section attracts investors. The loading Australian issues are strong. British Tobaccos sold at 40s and 40s 6d and it is some time since they touched that level. Dunlop Rubbers, although still below par, moved from 15s 6d to 16s. Anthony Hordern sold from 20s to 20s 3d and 20s Id and Aust. Iron and Steel (pref.) at 24s 4d. Broken Hill Pty. have not been in the picture this week, but prices are little changed. Reports from Australia are to the effect that the iron and steel industry is very active at present. The coming distribution of bonus shares by Woolworths (N.Z.) moved the buying" offer to £l3, with sellers at £l4 os. The other issues also firmed. Dom. Fertilisers sold to 23s sd, and Kauri Timbers at 22s 2d touched the highest point for some time.

Tbei Mining Section. The mining section has not had npich attention, but it is interesting to note the steady recovery of Mt. Lyelis. They sold from 20s to 20s 3d. The copper position is one of the most interesting. 1 read a report front London stating that the Rhodesian companies could produce and pay at levels far below other countries, and Canada, a big producer, really turns out copper as a by-product of its nickel and other operations. Big Rivers cased from 2s to Is 11-Jd, but Brian Borus sold at 2iJ-d and 3d. King Solomon are steady at 3s 9d, and Maori Gully at Is 5d to Is 6cl and Is 5-Jd. 'The overseas papers appear to regard it as certain that gold will remain at about the present price for an indefinite but long period. It has been stated that a return to gold at anything like the old standard would mean very heavy losses to the British stabilisation fund which been used to steady exchange movements. The fund is controlled by the Bank of England, but the financial responsibility rests on the Government.