INVESTMENT STOCKS.

Auckland Star, Volume LXI, Issue 188, 11 August 1930, Page 4

INVESTMENT STOCKS.

HAS BOTTOM BEEN REACHED?

CHRISTCHURCH BROKERS' VIEWS

A farm of Christchiirch sharebrokers has issued a survey of the present economic position, and quotes authorities which encourage the belief that an improvement will be more rapid than generally anticipated. The survey observes that following recent utterances appearing in the financial columns of the daily Press dealing with the factors, some world-wide in their influence, some more or less local, that affect the values of securities the time is opportune to comment on the trend of prices, and to summarise the information and advices received during the month from experts in London, New York, and Australia. These are prepared by world renowned financial specialists and summarised results are transmitted to us weekly by cable. A summary of the record indicates that industrial activity has zig-zagged sideways across the floor of the depression since last January, and that this fluctuating movement has lasted rfs long as any similar movement during the present century. A definite upward movement, they claim, should not be far away. "The chief reason for this confident expression of opinion," the survey continues, "is that production has declined far more rapidly than has consumption, and shortages are in the making. The combined forces of under-production and of abundant credit at low rates, are slowly but surely operating to remedy conditions, and to bring about business recovery as they always have done in times like the present. "Confirmation of these opinions is to be found in the report of the expert advisers of the British Cabinet Committee on unemployment. The ment of these experts was to the elfect that a careful survey of all relevant factors leads to the conclusion that the end of the depression is definitely in sight. The latest monthly review of the Westminster Bank, just to hand, lends the weight of its authority to this point of view. The -writer ventures the opinion that the recovery will on this occasion be much more rapid than, say, that which followed either the pre-war slump of 1900-7, or'the post-war slump of 1921-222.

Australia's Position. "Turning to Australia, the most significant fact of the present mouth is the successful flotation of the last Commonwealth loan of £10,000,000, which, as announced last Saturday, was considerably over-subscribed some days before subscriptions closed. The creation of this amount of new gilt-edged securities naturally affected the market. The law of supply and demand applies equally to securities as to commodities. As this loan was raised in Australia, where the supply of money for investment is limited, as in every other country, by the amount of the savings of the people, it, naturally followed that the prices of all stocks and shares were prejudicially affected. Those that respond most rapidly to changes in the relative volume of money were the first to feel the influence of the Government's financial operation; and there was during this month a recession in bank shares, for instance. Advices suggest that as the market has now absorbed this loan, there should be no further material decline in bank shares, although, of course, there may be minor fluctuations. That Australia's credit still ranks high is evidenced by the steady demand for her public securities in both London and New York.

"For some months past we have refrained from definitely recommending clients to purchase either stocks or shares, but we are now of the opinion that the time has arrived when the wise investor should be on the look-out for bargains in the ordinary shares of those companies whose past history is a record of prudent and successful management. It may be that the bottom of the depression has not been reached, but this can only be ascertained when the upturn has been in progress some time. "Appended is the following list of securities as examples of what we think are bargains at round about to-day's prices and as such well worthy of the serious attention of the wise investor:— Return Bank Accrued Net p.c. Approx. div. price on market Last in to net price. div. price, investor, price. £ a. d. p.c. 8. (1. £ a. d. £s. fi. Conim. Aust. —• 113 15 09 106 7C4 Nat. Aust.— CI9G 10 1C CIS 6 740 E., S. and A.— 5 18 0 12J 13 5 1C 9 6 S 0 Comm. Sydney— •M 0 0 10 12 G 19 7 G G 9 0