MONEY MARKET

Ashburton Guardian, Volume 55, Issue 273, 31 August 1935, Page 7

MONEY MARKET

EFFECT OF THE SESSION.

MORTGAGE CORPORATION TERMS THE WEEK ON 'CHANGE. (Written for the "Guardian” by "Investor”). \ The Speech from the Throne at the opening of Parliament was phrased in very general terms; but there may he a great deal of importance covered by the promise of "amendments to the law relating to the dairy industry, land and income tax, coal mines, mining, public works, electric power boards, health, and war pensions.” The Minister of Finance will have by this time detailed information with regard to the national accounts for the past year; and naturally the taxpayer will anticipate some relief from the existing burden. The surplus has been used to wipe off the greater part of the deficits in previous years, and in this respect the Dominion has been somewhat fortunate. Mr Downie Stewart had built up fairly substantial accumulated surpluses and by using these and bringing certain reserves into the budget, the Dominion has been able to avoid 1 making any substantial additions to the national indebtedness. The policy is undoubtedly a sound one, and the Dominion will reap the benefit in the years ahead. Matters financial always are prominent in the session preceding a general election, and it is unlikely that this session will prove any exception to the rule.

The announcement by the directors of the Mortgage Corporation of the terms governing the first issue of bonds created widespread interest. The return to the investor, 3$ per cent., appears to be regarded as unduly low, and trustees who* had! anticipated an avenue of investment for their funds have expressed some disappointment. Inevitably the comparison has been drawn between this" new issue and the terms on which local hody debentures, for the most part trustee investments, can be obtained. It will be interesting to see what response is made, and one can only hope that the flotation will be a success, because so much depends upon the sqpcessful operations of the corporation. Attention to Government Issues.

Perhaps it has been the low rate of interest offered for the new issue that has caused investors to give more attention to the Government section. Business has been more brisk than for a considerable time, Christchurch alone reporting sales exceeding £12,000. The bulk of the transactions wasin 3| per cent. 1938-52 at £IOB 17s 6d, earlier maturity 1939-43 had business at £lO4 15s. Late in the week there were few sellers.

The banking section has not been active, and prices generally "have been at a lower level. Sellers of Commercials were 4d down at 16s 6d, and of the prefs., 6s 6d lower at £9 10s 6d. In fact, right through, quotations have been reduced and margins are wider. Com. of Sydney had business at £l7 9s, and New South Wales ex div. sold at £32 and £32 7s 6d. Insurances also are a little easier, but with the exception of Auckland, the markets have been strangely inactive.

In the loan and agency section, movements are difficult to follow. Higher prices are predicted for wool, and that may account for dealings in Dalgetys at £8 10s; but on the other hand, Goldsbrough Morts fell to 32s 4d, and have sellers at 335. Mortgage Corporation shares early in. the week dropped sharply from 6s 5d to >s, but recovered some of the lost ground with buyers at 6s Id, sellers 6s 4d. The Meat Section Firm.' The meat section, though not busy, is firm. N.Z. Refrig, paid, after business at 20s 7d, had buyers at 20s Bd, and the inquiry has been more widespread. _ The brewery section has been tar from active. New Zealands eased to 60s 6d, but later recovered to 51s, which price more were available. For both issues of Timarus buyers lowered their limits, but sellers were unchanged at 14s 3d for the ords. and 9s Id for the conts. There lias been good inquiry for several Australian issues, and buyers of Tooths wei'e Is 3d up for the week at 53s 6d. The miscellaneous section did not escape the downward movement. A. Horderns sold at 19s and 19s 6d, with later sellers at 19s 4d. Australian Glass, which recently touched 85s, had business at 81s, though buyers stayed in at 81s 6d. Broken Hill Pty. came from 66s 2d to 64s 6d, but recovered later with buyers in at 60s. G. J.

Coles, an. issue very active in recent weeks, eased from 68s 2d to 67s 3d, and sellers offered more at 66s 6d. Dunlop Rubbers are weak with dealings from 14s 9d to 14s sd, and sellers at 14s 3d. N.Z. Farmers’ Cor-op. A pref. were very firm, with a sale at 42s 6d and buyers at 42s 3d, and the B pref. have buyers at 33s 3d.against 27s last week. The 41 per cent, stock has had attention, the 1940’s touching £BB, easing later to £B6 15s, and the 1945’s selling at £B7. Individual sales have been fairly numerous. The Mining Section.

In the mining section there has been no outstanding development, with the exception of interest in some of the new enterprises developing properties in Fiji. The'payment of £5 12s for Lolonia shares paid, to 3s indicates a wonderful degree of optimism with regard to the prospects. Big Rivers had sale and sellers at Is llld, King Solomons at 3s 7d and 3s 6d, Maori Gully Is 3d, Mahakipawa 21 d and 2d, the 1929 pref. at 41 d, Brian Boru 31d, Skippers 3d, Gillespie’s Beach Is Id, cum div., Lawson’s Flat 4d, and Golden Dawn 2s Bd.