THE WEEK REVIEWED.

Auckland Star, Volume LXVIII, Issue 234, 2 October 1937, Page 4

THE WEEK REVIEWED.

POLITICS AND SHARES. REACTION TO BUDGET. INVESTORS NOT WORRIED. Of many disturbing influences that affect the smooth running of the local investment business, much the most important was the appearance of the Labour Government's second Budget. The importance attributed by tne market to the issues involved in this production may be gauged from the fact that 011 the day pieceding its publication business on the local Exchange was almost at a standstill- At the noon call on Tuesday not u single sale was recorded on the Auckland ~Q Exchange— a most unusual state of a flairs

lhe reception of the Budget has, on the whole, been lea.sonably satisfactory. Sliarehrokers are naturally concerned over an\ legislative action that may prejudice the success of undertakings whose shares tliey handle. Kiting costs and heavy taxation that threaten to ciipple many industries are the principal bugbear at the Present time, and the altsence of any telief in this connection i.s a definite disappointment.

011 t!ie other hand there lias always been an underlying fear in financial circles that the (lOVfi'innent would concede the wishes of the radical section of the Labour party and make drastic inroads upon the litianci.il fabric upon which the country's economy has been founded. It is, moreover. conceivable that the rate of taxation -already almost confiscatory- might have Ijoen increased or the incidence amended so as to press unduly upon particular interests. None of these things have happened. Taxation rates are unchanged, and the Budget proposals do not reveal any departure from orthodox}in finance. The lavish expenditure outlined in the Government's proposals is on a colossal scale for so small a community, but so long as it has the lvtcking of approximately £65,000,000 annually in

exports last year's record—industry, as a whole, may stand the strain. The future obviously rests on the world's markets. If those change to the Dominion's detriment there must come a day of reckoning, but in the meanwhile internal trade should receive further stimulus except in the case of industries in which the rising tide of costs has already overtaken revenue, actual and potential. Investors u° P eer into the future to learn whether the prosperity stimulated by the (rovernment's spending programme id likely to last may be advised to keep a close watch on the world's markets, where the final word is spoken in the price paid for our farmers' produce. Meanwhile it can be stated that the Budget has not, as yet, produced an unfavourable reaction on the Stock Exchange. Menace of War. Tlje other chief factor affecting securities is in the international sphere, where the possibility of the Empire and other nations becoming involved in war still causes uneasiness. The most that can be said in this regard is that the menace has not been accentuated, and the London markets have shown a definite improvement in the last week. An exception is provided in the markets for base metals, which have eased substantially due to the growing belief that increased production will prove ample for requirements despite the special needs of the armaments programme now being rushed ahead by various nations. With two days taken from the ordinary week—one to allow stockbrokers to join the populace which migrated to Eden Park to see the Springboks at Rugbv, the other to permit the fitting observance of Dominion Day—turnover was much smaller than usual. Banks Improve. Turnover in the banking section was small, but there was an improved inquiry for Australian banks at the close of the week. Buyers raised their offers to £32 15/ for New South Wales, and to £.5 11/ for English and Scottish without response from holdere in either case. New Zealands dropped back to 44/ the night the Budget was to be delivered, but recovered later to 44/3, with buyers still in at that figure.

Insurances Quiet. Insurances were steady at the lower levelg recently established, the only sales being of New Zealands at 63/. Fixed Term Securities. The demand for Government stocks continues, but seems scarcely so keon as was the ease a month ago. The 1952-55's sold at £105, which compares with £105 5/ a month ago, and in the meantime accrued interest has amounted to 6/9. The return to the present purchaser is approximately 3% per cent per annum, or % per cent more than local bodies are allowed to pay for new loans, and % per cent more than the Government itself is offering for the purposes of the State Advances Department. The new 3% per cent issue of the present Government was slightly easier, selling 2/6 lower at £98 15/.

A fair quantity of local body debentures was on offer, but vendors' reserves were high, and the only business recorded was the sale of Mount Albert debentures at £106.

Mining. A feature of a quiet mining section was that, of four issues traded in, four were of New Zealand enterprises, namely. Grey River, Skippers, Golden Crown and Coromandel. Mount Morgans had three sales at the unchanged figure of 10 9. During the week a cable was received from Sydney announcing the profits earned by North Broken Hill Company. These reached the astounding total of £910,627, nearly 50 per cent more than those recorded for the previous .year. A final dividend and bonus of 2/ a share makes the distribution to shareholders for the year 120 per cent. The previous year 77% per cent was paid. Australian Issues.

Only moderate turnover was recorded in Commonwealth industrials. These were slack early in the week a3 a reflection of international conditions, together with ' the prospects of approaching elections. At the close of the week a sharp fall in metals provided another bearish factor. Broken Hill Proprietary started the week well with advances from 77/ to 78/3. then slipped back to 77/, and improved slightly yesterday with a market between 77/2' and 78/. Electrolytic Zincs and Mount Lyelk were both easier at the close of the week. Colonial Sugars and Dunlops were steady, and Henry Jones, with a sale at 49/9, showed a gain of 1/6.

Dominion Securities. There was a steadv demand for a fairly wide range of Dominion securities, with most values fairly stable. Oue of the

highlights wae provided by Taranaki Oils, which received special attention following upon the Government announcement that it intends to eee that the search for oil in New Zealand is vigorously undertaken. Rightly or wrongly, some investors have drawn the conclusion that the position of shareholders in Taranaki Oil Fields, which at present has extensive l ights over allegedly oil-bearing areas, will be substantially benefited in consequence of the Government's policy. The shares started the week at 7/4, reaching peak at 7/9, the highest figure realised for many a year. The market then settled between 7/3 and 7/6. The par values of the shares is 30/, and they are paid to 24/7. The latest balance-sheet showed paid capital at £577,719, of which practically £206,000 had been spent in the search for oil, the balance being invested in various oil properties in the Dominion.

Gas shares were steady with business at 21/6. but Wilsons Cements were easier with sales at par. The shares of Silknit had a good demand, selling from 47/6 to 48/6. An unusual decline was noted in the ordinary £0 shares of Farmers' Auctioneering Company which, with an increased dividend pending, dropped back to 95/, compared with sales at par a fortnight ago. Tt will not be surnrising if these recover shortly. Dominion Breweries were steady at 40/G, but New Zealands are still feeling the weight of the new issue, and sold lid cheaper at 49/4. Trend of Market. The following table indicates the fluctuations in the values o: various securities: — BANKS. Dec. 22, Sep. 24, Oct. 1, 1930. 1937. 1937. £ 8. d. £ s. d. £ s. d. A'a.sla ... 12 H 0 11 12 <> §11 12 « Commercial O 10 o o 17 ;> 0 17 2 E.S. anil A. 1!) O ."> 10 t) r, 12 0 Nut., N.Z. ,3 4 I) 2 IS 0 2 18 3 Nat.. A U.S. 7 7 0 7 0 O 7 0 o N'.S.W. .. 3."> 0 0 32 15 0 33 0 0 N". Zealand 2 1(i 2 4 3 2 4 6 Union ...10 7 0 911 9 9 11 9 MISCELLANEOUS £ s. d. £ s. d. £ s. d. N.Z. Insur. 3 0 6 3 3 0 3 3 0 S. British 4 14 3 4 13 9 4 13 9 Holds., M. 1 15 9 1 14 3 1 14 3 British Tub. 2 8 3 2 9 6 »2 8 0 Broken Hill 4 2 <> 3 17 3 3 17 O Klee. Zinc. 2 10 0 2 15 0 2 14 6 (pref.) 2 12 41 2 Hi O 2.15 3 Col. Sugar 43 5 O 47 10 0 47 5 0 A lick. Gas 13 6 117 116 Wilsons C. —■ 1 0 0 1 0 0 N.Z. Brew. 2140 293 29 0 Dom. Brew. 1189 206 2010 GOVERNMENT STOCK. £ s. d. £ 8. d. £ s. d. 1952-55 101 5 0 105 5 O 105 O 0 11MU-52 102 5 0 104 5 0 104 5 0 1953-57 — 98 17 « 98 15 0 »Ex dividend. Latest Sales. . Sales since the last review have been as lollow: — Banks.—-New Zealand, £2 4/6, £2 4 ; 3 £2 4/0, £2 4/3; Commercial, 17/2. Insurances.—New Zealand, £3 3/ (2). Government, etc.—Stock, 15/1/53-57, 3'/-i per cent, £98 15/ (2); 15/6'52-55, 4 per cent, £105; May, 1939-52, 3'As per cent, £101 5/ (2); November, 1938-52. 3'A per cent. £104 5/; Mount Albert 8.C., 1/7/62 £106.

Mining.—Coromandel Gold, 1/OV6; Golden Crown, 4/4; Grey River, 7/9; Skippers, 2%d; Mount Morgan, 10/9 (3).

Australian, etc.—Broken Hill Proprietary, £3 17/, £3 18/3, £3 17/6, £3 17/3, £3 17/; Colonial Sugar, £47 10/ (2), £47 5/ (2); Dunlop Perdriau, £1 2/11. £1 3/ (3); Electrolytic Zinc., £2 15/.3, £2 14/6; (pref.) £2 16/ (2), £2 15/3; Felt and Textiles, £2 3/4!£; G. J. C-oles. £4 lfi'; Henry Jones, £2 9/9; Huddart Parker, £2 2/6; W. R. Carpenter. £2 7/; Woolworths (Syd.). £6 7/, £6 5/; Woolworths Holdings (S. Africa), 15/10, 15/7, 15/6.

Dominion.—Auckland Gas, £1 1/6, (con.) 13/; Guarantee Corporati«u, s'; Dominion Investment, 17/9; Newton King (pref.), 9/; Farmers' Auctioneering (£5 pd.), £4 15/; Kaiapoi Wool, 13/3; Dominion Breweries, £2 0/6; New Zealand Breweries, £2 9/4; Dental and Medical, 13/; Farmers' Trading, £1 0/3; H.M. Arcade. £1; McKenzies, £2 5/3; New Zealand Drug, £3 13/; New Zealand Newspapers, £1 18/6; New Zealand Perpetual Forests, £2 3/, £2 3/3; New Zealand Refrigerating (con.). 9/11; Northern Roller Mills, £1 1/; Radio (1936), £1 1/9; Reid Rubber. £1 6/6; Selfridges CN.Z. 12/ pd.), 12/, 12/6; Silknit (N.Z.), £2 7/6, £2 8/6; Tarnnaki Oil, 7/4 (2). 7/5. 7/8 (2), 7/9 (2); Wilsons Cement. £1 0/6, £1: Woolworths (N.Z.), £5.