THE WEEK REVIEWED.

Auckland Star, Volume LXVI, Issue 122, 25 May 1935, Page 4

THE WEEK REVIEWED.

BROKERS ARE BUSY.

MARKETS' HEALTHY TONE.

INTEREST RATES HARDEN. EFFJECT OX SECURITIES. Another satisfactory week for Auckland stock brokers concluded last night. The number of sales recorded was less than those for the preceding week, but turnover was quite substantial. Values generally were well maintained, though a slight easing tendency was noticeable yesterday. This appeared to be a reflection of Australian conditions, as Commonwealth securities were chiefly affected Treating the investment market as a whole nothing has occurred to detract from the favourable factors to which attention was drawn last week. London cables indicate a healthy condition at the world's financial centre, and recent weakness on Australian Exchanges may be attributed purely to market speculations, not to any economic cause. After a period of firming values there always comes a time when someone decides to make his profit and get out. Comparatively small operations of. this nature are quite sufficient to disturb the market for any particular security. In this Dominion the best news of the week was contained in yesterday's cables, which told of ati improvement in the London butter market. Such a change is long overdue, and though the peak of our export season has passed, there are still sufficient quantities available for sale to represent a large sum of money. Any accession to our export values is a direct addition to the wealth of the country and, directly or indirectly, benefits everyone who has a material stake in its welfare. Since last week's review appeared fresh balance-sheets from various industrial con- ] cerns have come to hand, and these,' I almost without exception, continue the Cheerful story of increased profits and dividends. Though there is still a long way to go before the return of those halcyon days which preceded the slump are approached th° present position is highly Ratifying, and affords ample grounds for optimism as to the future. In this connection it is as well to note the first signs of a reaction in regard to interest rates. Money has been cheap in consequence of restricted demand. While slump conditions prevailed there was no incentive to invest capital in industry and rates slipped down to the lowest levels known to the present generation. This in its turn brought an appreciation of capital values of securities, particularly those which, like Government stocks, have fixed interest returns. Now comes advice from Australia that interest rates there are hardening. Idle money is being absorbed in industry. This is a movement that is likely to continue and to spread. When it does Government stocks will case again, and he will be u shrewd investor who can gauge precisely when it is wise to take his profit and get out. Naturally these remarks do not apply to those who bought early to secure a permanent investment. They are not concerned in the fluctuations of the market. Their interest is available at the same rate whether the stock be valued at par or at £110. Business in Banks. In • the bank'ing section a notable feature was a persistent weakness in Commercial Banks which slipped 5d in the week, with final business at 15/3. At this price the scrip shows a return to the purchaser, based on the latest dividend of i> per cent, of 3% per cent. Bank of New Zealands were not as firm as usual, and vendors accepted a reduction o£ 6d in letting the scrip go at £2 10/0. Reserves responded strongly to the first dividend announcement, and sold from £0 14/3 to £6 14/0. More could have been placed at the higher figure, but holders had meanwhile raised their reserves to £6 15/0. At a valuation of £0 15/ the shares have risen 1/6 in the week. Other banking scrip was firmly held and values tended upwards. Insurances Quiet. The insurance section continued to show a slight easing tendency, though New Zealands steadied again with sales at £3 10/G and £3 10/9. Holders of South British opened the week with Reserves still at 99/, but buyers held off. Finally sellers dropped their limits to 98/3, bringing in a buyer at 97/, but no business resulted. A sale of Nationals at 21/ showed a drop of 3d. Fixed-Term Securities. Government stocks were again in keen demand and, while it can scarcely be said that the market has weakened, offers to I sell have been more numerous than was j the case a few weeks ago. It certainly looks as though values of most Government issues are either at the peak or very close to it. The 1940's changed hands first at £105 and later at 5/ lower, after whWi the market rested between £104 12/0 and £104 17/6. A sale of 3'/&'e at £106 15/, ex interest, showed an improvement equal to £1 since the last | sale. I

A fair sprinkling of local body debentures also came on the market and sales of three different issues of Waitemata County and one of Whangarei Borough were made. Trading debentures also were popular, business being effected in Amalgamated Bricks and Gisborne Sheepfarmers. It is correct to say that there is still an unsatisfied demand for all classes of fixed term securities, which command premiums ranging from just over par for the cheaper trading debentures to £12 10/ premium for Government 1935 stocks. Mining. There were no special features in the mining section. Waihis were, as usual, in steady demand, but any favourable movement resultant from the announcement that a 3/ refund to capital may be expected later in the year from the Hornhora settlement has apparently been offset by the statement that the company must accept payment in New Zealand currency instead of sterling. This is equivalent to a deduction of £22,000 from the company's profit and loss acount. Mount Morgans dropped 7d, with sales from £1 17/4 to £1 16/!). Amongst miscellaneous scrip King Solomons were active between 4/ and 4/1. and Big River from 2/3 to 2/4. Amongst unlisted shares Golden Crowns continue to attract and the 10d paid changed hands at -3/0. i Australians Weaken. During the greater part of the week there was a good market for Australian securities, but towards the close a reaction set in on the Commonwealth exchanges, and this was promptly reflected hero. Thus Broken Hill Proprietary, which had sold on a steadily firming market up to 58/, were on offer yesterday at £2 17/9 without attracting buyers. Holders of Goldsbroughs lowered their limits from 31/ to 30/6, and buyers dropped out. Dunlops, which had weakened steadily in recent weeks, continued to droop and a transfer was effected at 16/4, after which offers to sell at 2d lower were not accepted. Mount Lyells improved their position with sales up to 20/6 and subsequent buyers at 21/, and Woolworths (Sydney) were firm with business at 89/ and more wanted at that figure, but these were exceptions to a general casing movement.

Dominion Issues. The market for Dominion miscellaneous securities was, on the whole, steady and firm. A notable exception was provided in the case of New Zealand Breweries, which had been forced up in recent weeks by strong southern buying, and which suffered a relapse when these had been satisfied. From sales at 55/9 a fortnight ago the market had recedeo yesterday to sellers at 53/0 and no buyers. Auckland Gas shares failed to hold the recent peak price of 28/4, and sold at 28/. which is still 2/ above the price ruling a year ago. Coal shares reflected a seasonal movement, Pukemiros leading the way with s,ales up to 25/, while TaupirLs despite the fact that no ordinary dividend has been paid for two years, changed hands at 17/. Bycrofts firmed up again and sold ex-dividend, 9d higher at 51/0.

Notable amongst annual returns were those of the Farmers' Trading Company, which showed the best results in five years. Balance-sheet figures indicated a further improvement in the general financial position, and the directors have wisely decided that the time is opportune to pavoft" £220.000 in deposit funds partly in cash and partly with a fresh issue of ""lares. The old-established Northern Steamship Company published a satisfactory report and will again enter the list of dividend paying concerns when the directors' recommendation of a 5 per cent distribution is given effect to. A much younger enterprise, that known as Peters' Ice Cream Co., announced profits three times as great as those earned the previous year. In 1034 the directors withheld the profits for development purposes, but this year a dividend of 8 per cent is to be paid. , Trend of Pdarket. The following table indicates the flnctuations in values of various securities: — BANKS.

Doc. 20, May 17, May 24, 1934. 1035. 1935. £ s. U. £ s. d. £ s. d. Aus/asia .11 5 n II 2 ti 11 4 ft Commercial 0 l(i 4 0 15 8 0 15 3 K.S. and A. 5 4 ft 5 10 5 1 0 Nat. (N. 55.) 3 12 0 3 7 0 3 7 0 Nat. (Alls.) 0 2 0 0 f> ft <i 6 0 N.S.W. .. 31 5 I) 31 ft 0 31 7 0 New Zealand 2 8 11 2 11 0 2 10 0 Union ... 8 18 ft 8 14 ft S 17 <i Reserve ..(>llO 0 13 0 0 15 0 MISCELLANEOUS. N.Z. Ins. . 3 8 !) 3 Ift !) 3 10 0 8. liritish 4 10 0 4 IS 0 4 18 ft Golds. Mort 1 0 9 1 11 0 1 10 ft lirlt. Tob. 2 0 9 1 1!) ft 1 18 9 Col. SllfiUr 42 10 ft 41 7 0 40 17 0 A lick, lias 1 0 0 1 8 3 1 8 0 N. 55. Brew. 2 31 0 2 14 0 2 13 ft Waihi ... 1 17 9 223 203

Latest Sales. Sales completed since last review have been as follow: — Banks.—New Zealand, £2 10/6 (2); National, £3 7/ (2); National of Australasia (con.), £0 5/; Australasia, £11 2/; Commercial, 15/4, 15/3 (2); E.S. and A., £5 l>; New South Wales, £31 5/, £31 7/0; Keserve, £0 14/3, £0 14/0 (2). Insurances.—New Zealand, £3 10/0 (2), £3 10/9; National, £1 1/. Government, Etc, —Bonds, 105;) £112 10/; stocks, 1940, £105. £104 15/, 1040. £107 15/, 194!) £10S ;")/, 1055 £112 10/, 1939-52, 3Ms per cent, £100 15/. Hauraki Plains, 11102, 0 per cent. £105; Wai tenia ta County, 5% per cent, 1904 £112, 1945 £100, 1949 £100: Whangarei Borough, 4% per cent, 1900, £105; Amalgamated Brick (Auckland) £104, (Wellington) £103 15/; Gisborne Sheepfarmers, £101 10/. Mining.—Waihi, £2 1/6, £2 1/3 (2), £2 1/, £2 0/0, £2 1/, £2 0/0. £2 0/3; Grand Junction, 4/8; Lawson's Flat, 4Vsd; Skippers, 2%d, 2d; Mount Morgan, £1 17/4 (2), £1 10/9; King Solomon, 4/1 (2), 4/. 4/1: Maori Gully, 1/8% (2); Big River, 2/3 (2). 2/4; Alluvial Holdings, 1/8; Golden Crown (10d paid), 3/9. Australian, Etc. —Iron and Steel, £13/; Dunlop, 10/9 (2), 10/8, 10/4; EJeetrolyticZinc, £1 »/, £1 0/; Colonial ifugar, £41 f>/, £41 (3), £40 17/0 (2); Broken Hill Proprietary, £2 15/9, £2 17/, £2 18/ (2); Mount Lyell, £1 0/4, £1 O/O; Woolworth (Sydney), £4 8/ (2), £4 0/. Dominion.—Auckland Gas, £1 8/4 (3), £1 8/3 (2), £1 8/ (2); Pukcmiro, £1 4/. £1 5/; Bycroft, £2 11/0; Consolidated Brick, 0/3, 9/, 9/1, 9/ (2); Farmers' Fertiliser, £1 0/0, £1 0/0; New Zealand Refrigerating, £1 0/2 (3); "Sun" News, 0/1 (2). 0/3; Devonport Steam, £1 2/9; Roller Mills, £1 14/; Woolworth's (New; Zealand), pref., £2 0/4; Farmers' Auctioneering, B pref., £1 1/0; Traders' Finance, 7/: Dominion Pictures, 16/; New Zealand Drug. £4 1/3: K.D.V. Box, £1 1/0, £1 1/0 (con.) 10/9; Northern Steam, 7/8 (2); Farmers' Trading, 7/10, 7/11, .7/9; Taupiri, 17/ (2); Associated Motorists, pref., £1 5/: Farmers' Freezing, (£5) £5 1/, (£1) 20/3 (3).