SURPRISING DROP.

Auckland Star, Volume LXIX, Issue 120, 24 May 1938, Page 5

SURPRISING DROP.

NEW ZEALAND STOCKS OPINION IN LONDON. LABOUR M.P.S DEFENCE. The attention of London investors has been drawn to the statement of the Prime Minister, the Rt. Hon. M. J. Savapre, regarding a "whispering campagin"' which, he states, has resulted in a decline in the price of New Zealand Government stocks on the London market.

A letter to the newspapers by Mr. R. Stokes, M.P. (Labour, Ipswieli) expresses surprise that the marked improvement in New Zealand's economic position has not been recognised by the market. Expert opinion in Auckland appear= to concur with that of Mr. Stokes. Fall in New Zealand Stocks. The following table shows the fall in New Zealand Government stocks on the London market, the latest cabled prices being compared with those of three months ago and a year ago. The market valuta of British consols, Australian Commonwealth bonds and Xew South Wale* stocks on the same dates are given for comparison: — I May 21. Feb. 26. Year ago. t s. il. £ s. (1. £ s. d. Rr. C'ns'ls, 2J 74 1(1 0 78 0 0 70 10 0 <•<>lll. 5. 43 7r. 107 12 0 10S 12 0 108 13 O X. S. \Y. 4J, 33-73 .... 07 17 0 !(8 1(1 (I 90 17 (! N.Z. 4),. 4S-.-.8 00 2 (i 103 13 0 103 7 (! X.Z. 3'j. 40 . 00 7 (i 101 <> 3 100 17 (5 N.Z. 3, 45 . . OU 17 0 07 12 0 04 10 0 The above table indicates that whereas all classes of Government securities have fallen during the past 12 months, the decline has been relatively greater in Xew Zealand issues. Xew £(?;•-•.lui •"> per cents have fallen £(> 15/. :J.J per cents £1 18/0. and 4J per cents €4 11/3 in the past three months. The rrlativelv small dro;> in 3 I's has been due to the accumulation of interest. It may be added that other Xew Zealand securities, notably Xational Bank of Xew Zealand and Martha Mines, have dropped to record low levels in recent months, the fall being mainly attributed to selling {iressure in London. British M.P.'s Statement. Reference was made to the remarkable decline in Xew Zealand stocks in a letter to the newspapers by Mr. R. Stokes. M.P. (Labour, Ipswich), who won the Ipswich sent for Labour following the rejection by the Government of his firm's offer to make shells for the Government at no profit. He is managing director of the engineering firm of Railsome and Rapier.

Hie letter was cablftil from London by the Press Association. Mr. Stokes expresses surprise that the marked improvements in Xew Zealand's economic position have not been hailed in Britain with the satisfaction usual on such occasions. The indubitable fact that the buying power of urban and rural populations in Xew Zealand has been increased in the past two years, and the stabilisation of the earnings of the dairying industry as a result of the Government's guaranteed price scheme, also make it-difficult to understand the slight but persistent fall of Xew Zealand stocks. Bulls and bears should note Mr. Savage's repudiation of the mischievous rumour that he contemplates a tariff inimical to the manufacturers of Britain. Unsettled Markets. It appears that the general unsettlement of the markets is the main factor affecting Xew Zealand stocks, along with other- investments. Last week weakness continued in Xew Zealands, while Australians made a slight recovery. One financial expert in Auckland suggests that London investors are nervous of the results of State interference in industry and also of the possibility that the Government may use its powers in regard to the Reserve Bank's policy in such a manner as would detrimentally affect the country's credit. He considered, however, that a lack of buyers for the stocks, rather than pressure on the part of sellers, was chiefly responsible for the present market weakness.