THE WEEK REVIEWED.

Auckland Star, Volume LXXIII, Issue 37, 13 February 1937, Page 4

THE WEEK REVIEWED.

SATISFACtORY TURNOVER. MOST VALUES HOLD. INSURANCE SECTION STRONG. BANK OF XEW ZEALAXDS DULL. Though a satisfactory turnover was recorded on the Auckland Stock Exchange i'or the week ended last night, business' was not so consistently good as it had been previously. There were spells of quietness, followed by fair activity. Sales covered a wide range and values generally speaking were steady. There was a persistent demand for Government stocks, but offerings were freer than they have been, and buyers had the better of such changes as occurred. The til'st sale of the newly converted 3M: per cents took place yesterday afternoon, and as anticipated the vendor had to accept a loss on his holding. A parcel changed hands at £98. The scrip is due for redemption in 1953-57, at the option of the Government. .Allowing for redemption at the shorter term, the return to

tlie present purchaser would be approximately £3 13/ per cent per annum. In view of the present valuation, it is apparent that the Government was fortunate in behlK able to convert the bulk of its

1937-40 ' loan into 3'/£ per cents at par, and it is not surprising that a fairly substantial minority declined to accept the Minister's offer. With the cash in hand they can now buy the same £100 stock for £98, receiving also 5/ in accrued interest. Based on interest return to the present, purchaser the new stock is now fairly valued by comparison with other medium and long-dated Government issues.

There was a strong demand for the debentures of the Auckland Harbour Board and Auckland City. Xone of the Harbour Board scrip was on offer, but two parcels of Auckland City were available and sold readily at £103, showing an interest yield to the purchaser of approximately 3 4-5 per cent per annum. In trading issues Amalgamated Bricks (Auckland) finned up with a sale at

£104, the highest price realised for a considerable period, A half-year's interest, £3, is due on Marcli 1. Banking Shares.

Moderate interest was shown in the banking section, which had one or two bright spots. Unions firmed up at the close of the week, apparently under the .stimulus of a London demand. Buyers moved up to £10 12/, and for a parcel with London registration £10 14/0 was offered with no response from holders in either case. New South Wales gained 7/6 in the week, with sales at £35 15/ and £36. Commercials were easier and sold 2d lower at 19/3. "Bank of New Zealand" Neglected.

JCevv Zealands were again very "sticky." Starting the week at 40/7, the shares slipped back to 40/. A parcel was placed later at 40/3, but this partial recovery was short-lived and a subsequent transaction was at £2.

There is no gainsaying the fact that, as a gilt-edged security, the shares of the Bank of New Zealand are easily the best buying on the market to-day. Based on latest dividends they pay the present investor nearly a per cent on his outlay, which compares with just over 3 j-8 per cent on Government stock, less than 2% on South British Insurance and from 3 per cent to 3% for Australian banks. The explanation, of course, is that investors are nervous as to possible action by the Government that may still further curtail the bank's earning capacity. It may be as well at this utage'to emphasise a few vital facts. The bank has a paid capital of over £6,000.000, exceeded in Australasia only by the Bank of New South Wales. At latest balancing its total assets exceeded £51,000,000, of which more than £27,000,000 was in liquid form. It holds, an unchallenged position as the leading financial institution in the Dominion, and the smooth conduct of tlio country's commerce is very largely centred in its hands.

All that has happened since the Labour Government assumed office, apart from changes in th edirectorate, which may or not prove prejudicial, has been the loss of Government business and its share in the financing of the dairy industry. These, it is true, are important items, and only time can tell to what extent they may reduce the_ bank's profits. Six months ago the writer warned investors to be prepared for a reduction of the dividend rate from 10 to 8 per cent. However, in the nieantirae, the directors have paid, an interim dividend of 5 per cent. It is a maxim recognised by mo«t companies of sound standing that the interim distribution shall not be at a higher rate than is likely to be continued in the fiiu! pavincut. It can. thei" l f&vo, be confidently assumed that shareholders for the current year will receive the usual 10 per cent for the full term.

Any suggestion that the present Government is lifcclv to take any steps calculated to injure the country's national bank must be discounted by the fact that more than a third of the shares are held by the Government. Complete nationalisation ha,? been mentioned, but much water must pass under the bridge before such a scheme could become operative, and even in such event the margin of reajisalile assets over liabilities would be considerably greater than the present market value of the shares.

Insurances Firmer. After a period of comparative quietness and steady trading insurances took an upward turn. South British moved up from 96/ to 08/0. More could .have been placed at that money, but holders retired to £5. Meanwhile New Zcalands showed a slight improvement, the final pale at 01/9. ex dividend, comparing with Cl/3, cum dividend the previous week, Mount Morgans Again. I'lle only active line in the mining section was Mount Morgans which, after a temporary lull, cainc with a rush at the close of the week. Sales were made at the. last call yesterday from 16/u'/& to 16/9. Chain Stores,

Chain store shares again had a pood market. A sharp fall in values occurred in the ca.se of Sclfridges (New Zealand) shares. Paid to 4/ this scrip lind a warm reception when it first came on the market last week, finding ready buyers at 8/ to 8/(i. This week brought a reaction and values dropped steadily to a final transaction at 5/. Meanwhile tlie shares o£ the parent company, Solfl'idfjes (Australasia), were in good demand, but a slight casing was noted, with sales from 41/G to 41/8. back- to 40/. Woolworths had steady business, with minor fluctuations. The parent company's shares sold from £8 11/6 to £8 14/, and hack to £8 12/, West Australian from £7 8/G to £7 7/. and New Zealande from £7 3/ to £7. Meanwhile G. J. Coles showed a very firm front, and in response to a keen demand the shares touched a new high point, with final sales at £~> 3/6 ant! £5 3/9, a gain of 4/ in the week. Australian Issues. As distinct from chain etore scrip Australian industrials, though asked for regularly, did not evoke keen competition. Broken Hills, Australian Glass. Dunlops, Morte Dock, and Hume Pipe all had busi-, ness at late rates, while British Tobacco, with a sale at 51/6, gained a shilling.. The world's metal markets, despite frequent fluctuations, continue to move upwards, but Electrolytic Zincs and Mount Lyells have only partially reflected the latest advances. Zinc preferences eold 6d lower at 56/. and Lyells at 43/7 were 1/1 better. The great improvement in Fiji commerce has been noted, and the shares of tlm big Island firm with headquarters at Suva. Morris Hedstrom, sold 3/ up at 2D/3. with later sales at 29/3 and 30/3. Dominion Securities. There was a 'moderate demand for a fair range of Dominion industrials and departmental stores, but with few special features. Dominion Breweries; which finned up in anticipation of a favourable announcement from the directors, failed to hold the full extent of a rise to 45/, | and sold later at 44/3. New Zealands I were steady at 57/3, and Auckland Gas. having paid the final dividend, were easier with a sale at 22/6. More were available at that price, but buyers withdrew.

Farmers' Trading maintained recent firmness and touched a new high level, with business at 23/8. Consolidated Bricks tinned up with sales from 10/3 to 10/ li. Taranaki Oils, after a lengthy period of neglect, again received attention with sales up to 2/9. The unlisted class contains quite a number of desirable securities, and of these Silknit changed hands at 57/6 and National Tobacco at 57/3, each being £1 shares.

Trend of Market. The following table indicates the fluctuations in values ' of various securities:— Dec. 22, Feb. 5, Feb. 12, 1930. 1937. 1937. £ s. d. £ s. (1. £ s. d. Aus'asia . 12 s C 12 1U 0 12 1U 0 Commercial I) ID 0 *0 19 5 019 3 E.S; and A. 5 I , J u U 5 0 0 U 0 Xat., X.Z. 3. 40 329 323 Xat., Aus. 7 7 (! 713 0 713 0 X.S. Wales 35 0 0 35 12 « 36 0 0 X. Zealand 21 (i 205 200 Union ... 10 7 (J 10 11 0 10 13 0 MISCELLANEOUS. £ s. il. £ s. d. £ s. d. X.Z. Insur. 30G 313*3 19 S. British 414 3 415 6 418 9 Golds., M. 115 U IIS 3 IIS 0 British Tob. 2 8 3 210 li' 211 (i Broken Hill 420 413 409 Blec. Zinc 210 0 214 9 214 0 Elec Zinc (pref.) . 212 0 216 G 2lβ 0 Col. Sugar 43 5 0 43 0 0 42 15 0 Auck. Gas 1 3 (I 1 3 S *1 2 G X.Z. Brew. 2 14 0 2 17 3 2 17 3 GOVERNMENT STOCK. K s. d. £ s. d. £ s. d. 1952-55 101 5 0 103 15 0 103 15 0 1939-52 102 0 0 101 5 0 101 12 G 1953-57 — — OS 0 0 ♦Ex bonus or dividend. Latest Sales. Sales completed since last review have been as follow:—

Banks.— New Zealand, £2, £2 0/7 (3), £2 0/0, £2 0/3, £2, £2 0/3, (D mort.) £1 7/; New South Wales, £35 15/ (2), £36; National, £3 2/3; Commercial, 19/3, (pref.) £9 3/. Insurances—National, 18/3 (3), 18/1%; South British, £4 16/, £4 18/6; New Zealand, £3 2/9, £3 1/9 ex. div. (2). _ Government, Etc. —Bonds, June 15, 1032-55, 4 per cent, £103 15/; Stock, March, 1939-43, 3V& per cent, £101 10/; 1938-52, 3% per cent, £101 15/, £101 12/6; 1943-40, 4 per cent, £103 15/ (2); 195357, 3Vj per cent, £98. Mount Albert Borough Council, July 1, 1941; £101 10/; City of Auckland, January 1, 1944, £103 (21; Auckland Transport Board, April 1, 19311, £103 15/; Amalgamated Brick, March 1, 1944, IVi per cent (Auckland), £104. Mining—Martha. £1, 19/3; Golden Crown, 5/1; Waihi Investment, 13/2; Mount Morgan, 16/6 (5), 16/5%, 16/8, 16/9; Worksop, 1/9; Maori Gully, 6d. Australian, Etc. —Woolworths (Sydney), £8 11/0, £S 14/, £8 13/, £8 12/6, £8 12/, (West Australia) £7 8/6, £7 7/6, £7 7/; Australian Glass, £4 13/6, £4 13/9, £4 13/0; Burns, Philp (South Sea), £1 13/5; Dunlop. 18/10, 18/11; Morris Hedstrom. £1 9/3, £1 9/0 (2), £1 10/3; G. J. Coles, £5, £4 19/9, £5, £5 1/3, £5 1/, £5 2/, £5 1/10, £5 3/6 (4), £5 3/9; Tooths, £2 17/3. £2 17/; Union Steam, (pref.) £1 6/3; Morts Dock, 13/3; Broken Hill Proprietary, £4 0/3, £4 0/6 (2); Selfridges (Aus.), old, £2 1/6, £2 1/8, £2 1/, £2 0/6, £2; British Tobacco, £2 11/6; Australian Iron and Steel, £1 7/5; Electrolytic Zinc, (pref.) £2 16/: Hume Pipe (us.). £1 1/: Amalgamated Wireless, £2 1/j Mount Lyell. £2 3/7; Colonial Sugar. £42 15/; Golrisbrough Mort, £1 18/; Waldas Shoes, £1 9/.

Dominion.— Dominion Breweries, £2 4/6. £2 I)/. £2 4/ (2), £2 4/3: New Zealand Breweries-. £2 17/3 (2): Farmers' Trading, £1 3/fl (2); Selfridges (Xew Zealand. 4/ paid), IS'B. 0/6. 5/0. 5/3. a/: Woolworths (New Zealand). £7 3/ (2), £7; Devonport Ferry. £1 0/6: Traders' Finance, (con.) 4/3 (2): Consolidated Brick, 10/3. 10/0 (3): Northern Roller Mills. £1 2/; Pukemiro. £1; Auckland Gas. (pd.. ex div.) £1 2/6: Newton King. fpref.l 0/0: Silknit. £2 17/6: Dental and Medical, 12/: Snnfnrd. 4/0; Westport, £1 4/3;- Dominion Fertiliser, £1 4/1 (2); Taranaki Oil. 2/7. 2/0: Farmers' Fertiliser. £1; Dominion Investment and Banking, 15/8: Rharland, 19/2; National Tobacco. £2 17/3.