THE WEEK REVIEWED.

Auckland Star, Volume LXIV, Issue 17, 21 January 1933, Page 4

THE WEEK REVIEWED.

A BUSY PERIOD

VALUES AFFECTED BY EXCHANGE RATES. WAIHIS' SHARP RISE. Auckland brokers have experienced a busy time during the week which ended last night. There was a dull spell when, the Exchange opened for the business of a new year, and it was not till Friday afternoon of last week that any activity was displayed. Thenceforward sales were freely made at each call, so that the aggregate turnover was greater than had been the case for a considerable period. Interest centred principally in Govern- j ment Stocks, which firmed up under persistent buying pressure, but it was by no means confined to this section. Good sales were made in a wide range of securities and the general tone of the market was healthy.

Yesterday a fresh factor was introduced when it became known that the bank exchange rates were to be raised. It is much too soon to estimate the ultimate effect of this move, but it did not take investors long to realise that the values of securities whose operations involved the transfer of money to the Old Country were likely to benefit. In this connection, Waihis, with a sharp rise of 2/9 per share, provided a conspicuous example. Then again the depreciation of New Zealand currency brings it close to parity with tiie Commonwealth, thus removing the cause of disparity in values between New Zealand and Commonwealth Exchanges. Colonial Sugars, for instance, rose £4 to sell at £52, which is close to Sydney values. It might have been expected that Government Stocks would weaken, if only slightly, but, although the arbitrary action of the Government is roundly condemned in financial and commercial circles, there was no reflection of this feeling in the quotations for public issues. Banks Are Firm. Detailing the business of the week, it will be found that bank shares accounted for a substantial portion of the turnover. New Zealands had the most sales and these were made on a falling market for the greater part of the week. Starting at £2 2/6, values dropped steadily to £2 1/9, after which the exchange position brought an advance of 1/, with a final sale at £2 3/. Nationals were firm after a sale at £3 4/6.

Whatever the ultimate result, it may be expected that ail immediate outcome will bo of benefit to the banks, who are specifically safeguarded against any loss from the exchange alteration, and whose accounts with the farming section of the community are likely to absorb a goodly proportion of the bonus that is indirectly allotted to primary producers.

Commercials had a great run. The stimulus of the recent dividend announcement carried them forivard from 14/2 to 14/8, and after the exchange notification buyers moved up to 15/9- At 16/ this scrip would show a rise of 2/6 since Christmas. Values of other Australian bank shares were readjusted yesterday. Trend of Market. The trend of the market since Christmas is shown in the following table:— BANKS. Dec. Jan. Jan. 22, 13, 20, 1932. 1933. 1933. Australasia 180/ — — Commercial 3 3/6 14/1 16/ E.S. and A 82/6 82/6 87/6 National (N. Zealand) 65/ 65/ 65/ National (A'sia) con. . 105/ 105/ 315/ New South Wales .. . 520/ 520/ 080/ New Zealand 40/6 42/6 42/9 Union 135/ 140/ — MISCELLANEOUS. Dec. Jan. Jan. 22, 13, 20, 1932. 1933. 1933. New Zealand Insurance 41/ 41/6 44/3 South British 54/ 54/6 56/ Goldsbrougli, Mort ... 21/6 22/ 24/ Colonial Sugar 920/ 920/ 1040/ Auckland Gas ** 21/ 21/ 21/3

Insurances Very Firm. There lias been a steady firming in insurance script that has been only partially reflected in actual sales. The notification of an interim dividend at the usual rate of a shilling per share by the directors of New Zealand Insurance has hardened the section as a whole. A sale of this scrip took place after the dividend announcement at £2 3/, but subsequently offers to buy at 6d higher failed to bring business, and a closing transaction was at £2 4/3. Meanwhile, buyers for South British moved up 9d to £2 15/3, with holders standing out for £2 18/. The exchange alteration saw buyers increase their offers for Queensland by 2/6 to £2 Government Stocks. There was a steady and insistent demand for Government stocks. Four and a half's started with sales at £94 10/ and finished up with buyers at £1 higher, while 5-/2*B increased 15/, with sales at £101. It is a long while since these have sold above par. The opinion seems to be gaining ground that the Government is likely to relinquish or, at any rate, substantially ■modify, the drastic proposals in regard to interest rates, which were forecasted as a feature of its legislation programme. The Treasurer will certainly need substantial additional funds as the outcome of its exchange policy, and to obtain these will have to pay market rates.

Local body issues were again offered in abundance to a somewhat apathetic bench. Only a few select lines are seriously inquired for. although occasionally an outside lots elicits a speculative bid. Two parcels of Otahuhu Council debentures were placed at 6 per cent, and, as they run till 1961, the purchaser at £98 has the excellent return of 5% per cent per annum, based upon redemption at maturity, and after payment of the Government 10 per cent stamp tax. In the event of that tax not being renewed after 1935, the purchaser will be that much better off. On a similar basis a sale of Hamilton Borough stock gives the purchaser 5% per cent per annum. Interest Return. The following table indicates the return available to purchasers of Government securities at latest valuations;— Interest return Current Accrued per Government price. interest, annum.* Loan. £ s. d. £ s. d. ■"£ s. d. 55, 1937, Sept. 101 0 0 1 18 10 5 5 0 42, 1938 95 15 0 14 8 5 3 0 ♦The column headed "Interest return" shows the annual return to the present purchaser based on redemption at maturity and after allowance has been made for the Government stamp tax of 10 per cent. Mining. Waihis practically dominated a busy mining section. The scrip was in steady inquiry, with sales from 18/10 to 19/, until premonitions of the exchange announcement brought a late sale on Thursday at 19/3. At the ten o'clock call yesterday the scrip sold at £1 1/, at noon it brought 21/6 and in the afternoon up to 21/9. What with the gold premium and the higher exchange, Waihis have certainly special claims to favour at the present time. By rejection the subordinate compauy, Grand Junctions, moved up from 3/2 to 3/9. There were no special features in miscellaneous scrip. An active demand was in evidence with recent valuations generally maintained. Miscellaneous. Australian issues produced more business than had been the case for some time and, as already indicated, the close of the week saw higher valuations placed upon the more popular lines. Dominion general securities had a small share in the total business. Auckland Gas, in view of the near approach of its]

annual meeting and a possible final diviI dend, sold 3d better at £1 1/3. The view ! that the timber industry is at laet making j some headway after several years in the doldrums was reflected in sales of Kauri Timber, which rose 6d in the week, with I sales from 10/9 to 11/3. j Latest Sales. | Sales completed since laet review have been as follow:— Banks: New Zealand, £2 2/6, £2 2/4%, I £2 2/6 (2), £2 2/3 (2), £2 2/ (2), £2 1/9, £2 2/9; National of New Zealand, £3 4/6; Commercial, 14/2, 14/4, 14/5, 14/6, 14/8; E.S. and A. Bank, £4; National of Australia (con.), £5 5/; Bank of New South Wales, £'27. Insurance: New Zealand, £2 3/; National, 14/. Breweries: New Zealand, £1 6/. Government, etc.: 4'/2 (1939), £94 10/ (2), £95 (2), £95 5/; 5% (1938), £95 (3); 5% (1936). £100 5/, £101; 5% (1937, Feb.), £100 5/ (2), £101; s]/s5 ] /s (1937, Sept.), £100 10/, £101 (3); Otahuhu Borough Council (1961), 6 per cent, £98 (2); Hamilton Borough Council (1941), 4% per cent, £3S. Mining: Waihi, 18/10, 19/ (3), 19/3, 21/, 21/6 (4), 21/8, 21/9; Grand Junction, 3/2 (5), 3/3 (2), 3/9; King Solomon, 2/3 (2); Golden Dawn, 4/6; Waitahu. 3/10. Australian: Goldsbrough, Mort, £12/, £1 2/3; Electrolytic Zinc, 18/; ditto (pref.), £1 6/3. £1 8/; Mount Lycli, 19/4%. 19/6, 21/3; Australian Glass, £2; British Tobacco, £1 8/6; Colonial Sugar, £48, £.V 2; Henry .Tones, £1 16/. Dominion: Auckland Gas, £11/ (2), £1 1/3; Kauri Timber, 10/9, 11/, 11/3 (2); Devonport Steam, 18/3; Wilsons Cement, £1 6/9 (3): Theatre Arcade (pref.), 16/. Unofficial: New Zealand Newspapers, £1; National Tobacco, £2 18/ (2); Dominion Brewery, 6/. POSITION IN DUNEDIN. (By Telegraph.—Press Association.) DUNEDIN, this day. Market reaction to the raising of the exchange rate was noticeable on the Stock Exchange to-day, when tne demand for most lines of Australian stocks, and many of the mining shares, increased sharply. Australian Glass shares, which had long stood at around £1 18/ to £1 19/, were in demand at £2 3/, and similar rises were evident in such stocks ,as Bank of New South Wales, Commercial Bank, Dalgetys, British Tobaccos, and Mount Lyeils. There was little or no change in prices for Government loans.