THE WEEK REVIEWED.

Auckland Star, Volume LXVII, Issue 193, 15 August 1936, Page 4

THE WEEK REVIEWED.

. SLIGHT IMPROVEMENT'. MORE SALES RECORDED. BANK SHARES STILL DULL. GILT EDGES IN COOL STORES. There was increased turnover on the Auckland Stock Exchange for the period 1 which ended last night, and a slightly 5 better tone on the market. The increase; however, was confined to miscellaneous ! Australian and New Zealand securities— the so-called gilt-edged issues—GovernJ' inent and municipal stocks, as well as banks and insurances being as dull as ever. Government stocks were in keen demand, but, as in recent weeks, there : were practically 110 sellers. They may • be said to be in cold storage: offerings ! are so rare. Not for years has there | been such a stale-mate. The position is , directly due to misgivings as to the effects of Labour legislation. Investors, generally, are genuinely concerned as to the outcome of the Government's financial policy, and those who own Government stock will not release their holdings even at a •profit. "Where can they place their money to better advantage?" is the natural query, and it is not easily answered. Even at the present firm rates Government stocks show approximately 3% per cent per annum to the present purchaser, based on redemption at maturity, and there are not many securities of the ready selling variety which give a better return. The person who turns his money into cash with a view to securing a better investment is faced with a perplexing problem. Mortgages! He will naturally prefer to wait for the details of the Government's promised legislation. Industrials! He must recognise that these have to stand the brunt of curtailed working hours, higher wages, advance in cost of raw materials and increased taxes. Only time will tell whether this section can secure from the increased wages of the workers —discounted by higher all round costs—sufficient profit to justify the maintenance of late dividend rates, to say nothing of overdue increases. In such circumstances the holder of surplus funds can scarcely be blamed for preferring the security of State bonds. Only three sales in this class were recorded, these being one each of the 1937-40's, 1946-49's and 1952-55's. The last showed a rise of 10/ since July 27. Popular issues of local body debentures were as scarce as Government stocks, and a parcel of Auckland City's 4% per cents, which came on the market, was easily placed at £5 above par. In trading debentures Amalgamated Bricks came in for favourable attention, and several parcels of the Auckland issue were placed at £102, the highest price realised since the last half-year's interest was paid in March. Bank of New Zealand Weak. The banking section continues dull and made but a scanty contribution to the sales list. New Zealands eased 3d, with business at 39/9. then steadied up at that level. The return on outlay based on latest dividend rates is over 5 per cent per annum. Not for over a decade has the scrip of the country's chief bank been held so cheap in comparison with other securities. The writer has long held the view that the directors were likely to lower the dividend rate from 10 per cent, but even if it were reduced to S per cent the return to the- present purchaser at 4 per cent per annum would be higher than is obtainable from an average sound industrial. It must not be forgotten that the State, as a predominant partner, stands to lose substantially if the dividend rate were lowered to any great extent. There should bf no incentive for the Minister of Finance to take any action calculated to cripple the I bank's earning power. It is true the land tax may be expected to make a big hole in the bank's profits, but there should be good returns from general business during, the current year, and, so far ns can be judged at the present time, the outlook is finite satisfactory. Sales of other banking shares, including Australian, reflected the general dullness, and any changes in values favoured buyers. Insurances Quiet. There were a few more sales in the insurance section, but little strength in the market. Xcw Zealands were steady at £3 2/6, but South British dropped 1/3 in the week, with a final sale at 89/. At latest valuations buyers of New Zealand secure 3V& per cent per annum on their purchases, and those of South British 3 per cent. Mining. In the mining section Mount Morgans were the most active, selling freely between 14/ and 13/11. Marthas eased further, with business first at 17/10 and later at 17/6. Amongst local issues Golden Crowns, which recently announced a new capital issue, with a premium of 3/ 011 the 2/ shares, slipped back, the shares selling from 4/9 to 4/. The section is suffering from two adverse factors, the lower price of gold on the world's markets and the refusal of the Government to cancel the export gold tax. Australian Issues. There was more business and a better tone in regard to miscellaneous Australian issues. Broken Hills and G. J. Coles were the strongest lines. The former sold freely from 72/9 to 74/6, with an odd sale in between at 74/9. Coles improved daily, with sales from £3 19/8 to £4 1/4 M. British Tobaccos dropped a shilling, with business at 39/9, but quickly recovered, and buyers at 40/6 yesterday were faced with sellers' reserves at 41/3. Electrolytic-Zincs were steady and Colonial Sugars eased slightly, with sales from £42 17/6 to £42 15/. Mount Lyells continued recent firmness and sold from 28/ to 29/9. Wool worths (Sydney) again attracted attention and sold from £5 15/ to £5 18/, but failed to hold the full extent of the advance, and a later transaction was at £5 16/6, with a final market between £5 12/ and £5 16/. Dominion Securities. For New Zealand industrials the demand showed some improvement from the slackness noted the previous week, but business did not cover nearly so wide a scope as was the case before the latest Parliamentary session began. However, values as a whole did not reveal any marked weakness, but rather hesitancy. Gas shares eased another 2d, with business at 23/10. and then remained steady. Dominion Breweries again came to the front, and sales reached new high levels at 29/3 and 29/6. New Zealands were unchanged at 52/. Renown Collieries maintained recent strength, and sold up to 13/9 (7/9 above par). Wittome, Stevenson's had their first transaction since March, 1935, selling 4/ higher at 18/. 1 Wooiworths (New Zealand) had steady trade between £5 7/ and £5 8/. Kaiapoi Woollen had business unchanged at 14/10, but then followed the southern trend, with buyers at»l4/10 and no sellers. Sanford shares were virtually unchanged. A further meeting of preference shareholders has been called, at which a proposal will be considered that they accept 4/ per share in full settlement of arrears totalling 6/. . An amendment will probably be moved that 3/ be accepted, as this figure is strqngly recommended by the directors. Trend of Market. The following table indicates the fluctuations in values of various securities: — Doc. 13. Aug. 7, Aug. 14, ] 1935. 1936. 1936. f £ s. d. £ s. d. £ s. d. r Aus'asia .11 7 0 11 17 6 11 17 6 ' Commercial 0 17 10 *0 18 1 0 18 0 ' E.S. and A. 5 9 6 6 2 G 6 16 Nat., N.Z. 3 12 0 3 3 0 3 3 0 Nat.. Aus. 6 19 0 720 720 N.S.W. . . 32 5 0 32 17 6 32 12 6 ! X. Zealand 2 7 10 1 19 0 -1 10 9 Union ... 9 II 0 *3 0 9 8 Oil

I MISCELLANEOUS. • £ s. d. £ s. d. £ s. dN.Z. Insur. 333 *3 26 326 S. British 4 12 0 4 10 3 490 Golds., M. 1 11 0 1 11 10 1 11 6 British Tob. 2 00 206 20!) Col. Sugar 42 10 0 43 0 0 42 12 6 Auck. Gas 1 0 9 *1 4 0 1 33 0 N.Z. Brew. 2 14 3 2 12 0 2 12 0 GOVERNMENT STOCK. £ s. d. £ s. d. £ s. d. 1937-40 102 7 0 101 7 6 101 7 6 1952-55 107 10 0 105 10 0 105 12 6 1939-52 102 10 0 /102 17 6 102 17 6 *Ex dividend. Latest Sales. Sales since last review have been as e follow: —- d Banks.—New Zealand, £2 (3), £1 19/9 v- (4); National, £3 3/ (2); New South ; Wales, £32 15/;' Commercial, 18/ (2). "' Insurances. —National, 18/; New Zeas land, £3 2/6 (5); South British, £4 9/9, - £4 9/. i- Government, Etc. —Bonds, January 15, s 1937-40, £101 5/; Stock. April 15, 1946-49, 4 per cent, £105 10/, June 15, 1052-55, 4 per cent, £105 12/6; Auckland City, January 1, 1944-63, 4% per cent, £105; Anialii gamated Brick (Auckland), March 1, e 1944, 7% per cent, £102 (3); Auckland Trotting Club, April 1, 1939-44, 6% per • cent, £101 5/ (2). s Mining.—Golden Crown, 4/9 (2), 4/6, 4/; G Golden Dawn, 3/; Grand Junctiou, J?7 s (3); King Solomon, 1/0% (2); Martha, s 17/10, 17/6; Mount Morgan, 14/ (2), 14/1 (3), 14/ (3), 13/10y 2 , 13/11; Maori Gully. 7d; Maerewhenua, 2%d, Mataki, ® 1/3; Waikoromiko, 6d. , Australian, Etc. —Australian Glass, £4 , 11/9, £4 12/3 (2), £4 12/, £4 11/9, £4 11/6; British Tobacco, £1 19/9; Broken Hill, £3 12/9, £3 13/3, £3 14/3 (2), £3 3 14/ (2), £3 14/3, £3 -14/6, £3 14/9, £3 » 14/6, (con.) £2 13/, £2 14/6; Electrolytic Zinc, £2 13/, (pref.) £2 3/7% (2), £2 s 3/6; G. J. Coles, £3 19/8, £3 19/6, £3 - 19/3, £4 0/9, £4 1/0, £4 1/4%; Colonial 1 Sugar, £42 17/6, £42 15/ (2); Kauri, £1 4/10, £1 4/8 (2); Henry Jones, £2 3/4Ys, £2 3/3; Dunlop, 18/1; Mount Lyell, £1 8/, £1 9/6, £1 9/9; Tooth's Breweries, 1 £2 13/3; Selfridge's (old), £1 5/2, £1 ' 5/10; Woohvorths (Sydney), £5 15/, £5 • 15/6. £5 16/, £5 18/, £5 16/6, (West Aus- ' tralia) £5 16/6 (2). I Dominion.—Auckland Gas, £1 4/ (2), £1 3/10; Dominion Rubber, £1 4/; Devonport Ferry, £1 1/9 (3); Farmers' Auctioneering. (B pref.) £1 1/6 (4), (£1 paid) 14/ (2), (A pref.) £1 2/6; Farmers' Trading. 18/11 (4), (B pref.) £1 1/6, £1 1/4: Kaiapoi, 14/10, (con.) G/6 (2); Leyland, O'Brien, £1 2/9 (2); New Zealand Newspapers, £2. 0/6 (4); New Zealand Drug, £3 15/; New Zealand Breweries, £2 12/; Dominion Breweries, £1 9/3, £1 9/6, £1 9/3, £1 9/6 (2); Milne and Choyce, (deb. stock) 14/6; Renown Collieries, 13/ (3); Taupiri, 15/10; Robinson Ice, £1 2/; Newton King, (pref.) 6/6 (2); Taupo Timber, (pref., 16/ paid) 15/3 (2); Traders' Finance, 13/6 (2); Whittome, Stevenson, 18/; Woolworths (New Zealand), £5 7/, £5 7/6, £5 8/, £5 7/.