DULL AFTER EASTER.

Auckland Star, Volume LXVIII, Issue 84, 10 April 1937, Page 4

DULL AFTER EASTER.

METAL MARKET CHANGES.

SOME BEARISH FACTORS. BANK OF N.Z. DIVIDENDS. Business on the Auckland Stock Exchange resumed on Monday, but the flow ot orders, following tltt Easter vacation, was but a tiny dribble. Bidding was veiy hesitant at the first few calls, and although it improved later on, there was nothing like the lite in the market that xiacl been apparent in the first quarter of the year.

A prime factor in this dullness was the check to the recent persistent advance in world metal prices. These fell steadily day by day until yesterday, and each successive decline in the raw material was followed by fresh reductions in the share valuations of important Australian concerns, notably Electrolj«c Zincs and Mount Lyells.

Another bearish element was introduced jesterday, when rumours were published that the 1 resident of the United States intended to exercise his authority by dropping the purchase price ot gold. The immediate result of this report was the maiking down of securities in London and on the Continental bourses, while Wall fetieet had one of its "blackest" days. 1 lie rumour has since been discredited, but its temporary circulation proved costly to Stock Exchange operators. The slackness ot business across the Tasman was inevitably reflected locally, for the investment connection between Australia and latiT 8 been ver y intimate of

It seems likely that the recent fall in prices may be recovered, for the position in regard to raw materials and of manufactures is one of unusual strength. Latest reports from U.S.A. indicate that boom conditions are again ruling in that counry, despite the set-back from floods in January and from industrial strikes, lielinnnary figures of motor registrations tor January showed a gain of 31 per cent over the same month in 1936, and steel mills were attaining record outputs. .British industrial activity ie maintained

and eminent London financiers have declared that the Government will have no great difficulty in financing the huge rearmament policy that is now being carried out. Only a few years back the statesmen of the big nations were chiefly concerned in an effort to the raising of prices; to-day their chief object ia to prevent the upward trend from getting out of hand. This country is already benefiting by the keen demand that exists for all raw materials in the record prices that have lately been paid for our wool.

With such conditions prevalent it is obvious that dullness in the investment market is not due to any inherent weakness, but purely to psychological reasons. In there has been a reaction— possibly only temporary—from a period of unrestricted optimism in which most popular issues had been forced up to levels which heavily discounted their improved earning power. In this Dominion there is the ever present fear that the Government's legislation will unduly penalise traders and that heavy taxation and added costs will more than ofT-set their increased turnover. Bank of New Zealand. The most notable event affecting the Dominion market has been the announcement that the directors of the Batik of New Zealand will recommend a final dividend at the unchanged rate of 10 per cent. I his is in line with the forecast made in these columns some months ago, when the attractiveness of the bank shares as an j investment was pointed out; they were then quoted at under £2. Even now there is little strength in the market for, after selling early in the week at 43/10, they slipped back to 43/7 at the close. This again is a political reaction reflecting uneasiness of the market in regard to possible legislative action. In this connection some idea of the Government's policy may be gleaned from the appointment of two representatives early in the week. The reappointment of Mr. A. T. Donnelly, of Christchurch, will have come as a welcome surprise to those who believed that the Government intended to make a clean sweep of all the old hands. Mr. Donnelly's appointment by the late Government was received with general appreciation, for, although not a trained banker, his standing in the legal and business world justified his addition to a board that was at that time mainly composed of gentlemen with extensive banking experience.

The appointment of Mr. John Dowgray, of Gramtv, in place of Sir Geo. Elliot, will not have surprised the market, for the Labour Government has made no secret of the fact that it intended to be represented on the board bv members m sympathy with its general policy Mr Dowgray s record of public service amongst the miners of the West Coast of the Soutn Island is an enviable one, but there is nothing to indicate that he has any knowledge of the practical side of banking. A Press Association summary of his qualifications states that "in recent years lie has. made a special study of finance. banking and monetary matters generally The same remarks could probably be made with equal justification regarding the other two Government apnointees. Mr. H. J. Kelliher. who has published unorthodox views upon banking subjects, and Mr. D. O. Williams, who is best known as a former lecturer m economics. The business of hankins is highly technical and investors, while regretting the departure from the board of such experienced financiers as an 1"? iu °" nr .Harold Beauchamp and Mr Oliver Nicholson, will find some consolation in the fact that the new apnointees will still have the assistance and co-operation of such expert hankers as Messrs. R. W. Gibhs and Wm. Watson, who are the shareholders' representtaives. The appointment of Mr. Donnelly a s chairman will receive general approval. Taking all the facts into consideration it would not apnear that investors have canse for anxiety in regard to th« immediate future of the country's leading financial institution. TJ»a la test dividend announcement.mav be taken as an indication that the interests of «hareholders-and the .""nment itself., a heaw shareholder —will be adonunMv protected.

Fixed Term Securities. Apparently as a corollary of the comparative dullness in other se&tions, Govthnn 1 w f to »t S in better demand than befoie the holidays, and there were inquiries for practically all issues, both 3%s and 4 per cents, with any changes m value slightly favouring vendors.

Banking Shares. There was a good demand for Australian banking shares, and here again alterations in value were usually in favour of sellers. E.S. and A.'s changed hands 1/6 higher at £6 11/6, and buyers for Unions moved up to £11 3/ without attracting holders. The announcement published in last night's "Star," that the directors of the Bank of Adelaide are recommending a higher dividend should confirm the recent confidence in this section. The market evidently anticipates an improvement in the distribution from the National Bank which has remained unchanged at 4 per cent per annum for a considerable periodTile scrip showed increased firmness, with business at 68/, a rise of 2/. Mining. Business in the mining section was again restricted to a small list of selected securities. The Waihi group was firmer, Martha's selling at 19/6, Waihi Investments at 15/, while Junctions had a market between 3/9 and 4/2, selling in the south at 4/. Mount Morgans were steady between 17/7 and 17/9, but Broken Hill Souths followed the metal markets down, with sales at 52/3 and 50/, a drop of 8/6 since Easter. Amongst local shares Golden Crowns improved 3d, with business at 5/ upon unconfirmed reports from the mine. The publication of the annual accounts of the Mataki Gold Dredging Company provided a fresh opportunity to voice the protest of mining interests against the perpetuation of the harrassing gold export tax.

Australian Issues. As already indicated the principal Australian industrials reflected the decline in metal markets as well as the slight recovery noted in yesterday's cables. Thus Mount Lyells started the week at £2 8/6, dropped to £2 5/6, and finished up with buyers at £2 7/6. Electrolytic Zincs and Broken Hill Proprietaries experienced similar changes. Dunlops, G. J. Coles and Australian Glass were steady at about late rates, while Colonial Sugars eased slightly, with sales from £45, 5/ to £45, and Tooths sold from 56/3 to 55/10. Woolworths (Sydney) made a slight recovery from the set-back which followed the latest announcement of the directors. The ordinaries, ex rights, sold from £7 to £7 1/6, and the rights from £4 7/6 to £4 11/. Dominion Securities. Dominion industrials were definitely quiet, though there were no marked reactions in values. A noticeable advance was registered by Peters Ice, which sold 4/ higher at 30/, the highest price realised since the last cupital issue was authorised a year ago. Taupiri Coals moved up to 17/6, but failed to hold the rise and sold later at 16/9. Gas shares eased at the close of the week with a sale at 21/0, a drop of 3d. Brewery shares were in good demand. New Zealand® improved, with sales from 59/ to 59/9, and Dominions eased 9d, with business at 39/. That some local industrials are giving good results in face of altered economic conditions was emphasised in an announcement made by the directors of Silknit Ltd., who are making an issue of 25,000 £1 shares, of which half are to be distributed as a bonus to existing shareholders. Prior to this announcement the shares had a market value of £3 10/. Details of the issue by the Farmers' Trading Company of 200,000 £ 1 shares are not yet available, but it is understood that although the full amount has not yet been applied for, the response was highly gratifying and entirely satisfactory to the directors and the management. Trend of Market. The following table indicates the fluctuations in the values of various securities:— Dec. 22, Mar. 23, Apl. 9, 1836. 1937. 1937. . , . £ s. d. £ s. d. £ s. d. Ausasia . 12 S 0 13 0 O 12 19 0 Commercial oID o 019 7 019 7 E.S. and A. 519 0 010 0 011 6 Nat., N.Z. 3 4 0 3 <5 ti 3 7 9 Nat., Aiis. 7.7 0 719 6 719 6 N.S. Wales 35 0 0 37 12 6 37 12 6 N T . Zealand 216 236 237 Union ... 10 7 6 11 2 6 11 4 0 MISCELLANEOUS. - £ 8. d. £ s. d. £ 8. d. N.Z. Insur 3 0 6 306 30 10 S- British 314 3 414 0 413 9 Golds., M. 115 » 118 6 117 0 British Tob. 283 2 12 0 2 11 G Broken Hill 426 480 439 Blec. Zinc 210 0 33 10 310 Elec. Zinc (pref.) .2 12 0 349 323 Col. "Sugar 43 5 0 43 0 O 45 0 O Auck. Gas 136 121 121 X.Z. Brow. 214 0 219 0 219 9 Worn. Brew. 118 9 119 9 119 0 GOVERNMENT STOCK. 8. d. £ s. d. £ s. d. 1J32-.J,» 111 l o 103 n 0 103 2(> 19311-52 102 0 0 301 15 O ]01 15 0 19..<i-o7 — 98 15 0 98 7 G Latest Sales. Sales since the last review have been as follow: — Banks.—New Zealand, £2 3/10 (2), £2 3/7 (2); Australasia, £12 19/; E.S. and A., £6 13/, £6 11/6; National Bank, £3 8/: Commercial, 19/6. Insurances.—New Zealand, £3 0/10 (2); National, 18/; South British, £4 14/, £4

Government, Etc.—Bonds. February 15, 1943-40,_4 per cent, £101 15/ (4), £102; April 15, 194&-49, 4 per cent, £103 5/ (4); .Tune 15. 1952-55. 4 per cent, £103 5/, £103 2/0. Stock, March, 1939-43. 3Mi per cent, £100 (4); November, 1938-52 , 3% per cent £101 15/ (2); June 15, 1952 -55. 4 per cent. £10c 5/ (2); January 15. 1953-57, 3% per cent, £98 5/ (2). Auckland Electric Power Board, April 30. 1943. £104; Mount Albert Borough Council. Julv 1. 1960 £104 15/; Amalgamated Brick (Auckland)' March 1, 1944. 6 per cent, £100 10/. Mining.—Golden Crown, 5/ (2): Martha 19/6 (3); Waihi Investment, 15/ (3) • Broken Hill South. £2 2/3. £2 10/Mount Morgan. 17/7. 17/9 (3), 17/8 (3) ; Rawang Tin, 12/6 M:, 12/6 Australian, Etc.—Australian Iron and Stfe- /P^f. ) £ l 8/7%; Australian Glass, (2) . : Ber,el (Sydney), £2; Broken Hill Proprietary, £4 5/ (3). £4 3/4, £4 r'/ 4/3; Colonial Sugar. £45 £ . i 5: Dunlon. Perdriau, £1 0/0 C.3) ®/9; Electrolytic Zinc. £3 1/fi £3 0/9. (nref.) £3 2/6 (21. £3 2/3; G J '1 : Mount Lyell, £2 8/0. £2 8/3 (5), £2 7/7%. £2 o'9 £•"> icln £ on' V ? -/ Tooths Brewerv. £2 16/3. £2 15/10; Yarra Falls. £2 3/6- Relfrulges. fold) £1 in' 6; Wool worth® VSvdnev ex rieht.s). £7. £7 2'. £7 1/fi (2) Joi £4 7/C ' £4 10,/ " £4 H/; (W.A.I (2). i

dominion;— Auckland Ga«. £1 •>'. £1 2/9: Consolidated Brick. !)/2 f4l !)7l" (o). Dominion Breweries, £1 10/; Dominion Fertiliser £1 3/11. £1 4/: Grey and Menzies. 11 /6 ; Hill and Plumper. £1 !/• Jy''v Boxes, fcon.) 5/3 (?): Kainpoi' 14/3, (Von.l 5/3. S/5: New Auckland 2/1 ri XT V: 1 orfhern Steam. Cnaid) ww!! : vf w Breweries. £2 10/ £■> WO; New Zealand Drncr. £3 lfi/ ; New Xnalnnd Pnfrigerat''™. 10/fi; Tutors To *' 1 10': Taupiri Collierips. 17'6 Ifi'f)Tarannki Oil. 4/3. A/2 (2): Trar'ei-s' FiVP f^ e Jr-r n) A/ ° : W«t.n W 2/1 Ol; WiUons Cement. £1 i"/ : War.l and Co. (in liquidation!. 1/1; Silknit. £3 10/