THE WEEK REVIEWED.

Auckland Star, Volume LXIX, Issue 208, 3 September 1938, Page 4

THE WEEK REVIEWED.

A DULL MARKET.

buyers after bargains.

INVESTORS ARE NERVOUS.

PRICES TEND DOWNWARDS.

From bail to worse

r Ihis mu*>t be the verdict after a study of business on the Stock Exchange during the week which ended last night. 11 f'ne, there were more recorded sales, but g a larger number than usual were the L- result of weak holders making concessions ; older to turn their scrip into cash, t lhe market is definitely weak, and •- bi okers who look back over their records 0 u jear ago and compare them with to--5 6 market may well wonder what has happened to bring about such a radical li change in their business. Here arc a few Y instances taken at random:— v ' Some Market Prices. s J Sept. 1, Sept. 1, , 1337. 15)38. 1 p£"r -J'," 1 Pr<> "- * * »' 317 Liectro. /.ii,o ( or d.) 3 0 6 2 2 0 ~,3« » 2 5 0 <"' T M>l - 3 8 1 « i> <r. J. Coles 4 17 o 'I I'l II Commercial Bank . . o 17 !) o It. 4 •VZ. Breweries 2 10 0 2 10 Dominion Breweries 2 2 0 1 lo 'J .VZ. Insurance 3 4 •> its s Farmers' Fertiliw-r 1 o 8 017 ■! C*ov f. Stock. 53-57, • r- 3i . P 'J ' 00 0 0 94 10 0 ; UOVf. Stock, ol!-55, 4 per cent '105 0 0 101 0 0 Ilie causes already reiterated in these : columns ar-j chiefly based 011 psychology. ' In the chief world centres international fears are a principal factor in depressing the markets, instead of buying securities, investors, fearful of war, are rushing to . sell them, to change them if possible for > gold with a view to shipping the pro- : ceeds in that form to the United States, j where they hope it will be secure. . Australia, apart from external re- . actions, is still threatened with a general . strike, in addition to which her export ! position has been materially weakened by a sharp drop in wheat prices. In this country investors, thrown back : for the reasons mentioned from outside 1 investments oil to New Zealand security*, a, "e worried by all the implications of the most ambitious policy of public works and social benefits ever announced in the history, of the Dominion. The latest menace is supplied in an amendment to the Social Security Bill. Already the State collects half, and sometimes more, of the net profits earned by successful companies, and any further impositions will inevitably tend to discourage industrial enterprise. Banks and Insurances. Dealing first with the banking section, daily quotations showed comparatively small interest in Australian issues, and the only sales recorded were ot Commercial Bank preferences and one of E. S. and A. New South Wales were quoted on a lower basis. New Zealands had a poor week, the only business being a couple of sales, one at 42/6 and the other at 42/3, a drop of 6d. Buyers for Nationals lowered their offers to 52/6, but sellers were firm at 54/. There was a steady demand for insurances, and business was done not only in South British and New Zealands. but also 111 Standards and Nationals. Standards at 55/6 showed a drop of 2/9 since the last sale in April. Government Stocks. Even the attraction usually possessed by Government stocks has been less potent in recent weeks, and there was no suggestion of a lift from the low values that have been ruling of late. The 4 per cents were fairly steady, but the 3Ms's eased further, and the 53-57 issue of the present Government with six weeks' interest accrued changed hands at £5 10/ under par. These facts seem to constitute a problem that will face the Government when it seeks to raise loans to carry out its public works policy, as the average rate available to present purchasers of existing loans based upon redemption at maturity is well up to 4 per cent per annum and in some cases over. A particularly free offering of local body debentures continued, but there were not many inquiries, and the only sales recorded were of Auckland Harbour and Auckland Transport Boards. Australians Weak. The demand for Australian industrials was slacker than has been the case for a considerable period, and, despite the general continuance of prosperous conditions in the Commonwealth, values were forced down. Even British Tobaccos and Australian Glass, which usually escape the fluctuations associated with price changes of metals and other raw materials, weakened with the rest. There were exceptions to the downward trend. The chain stores, G. J. Coles and Woolworths, also Dunlops and Mortfi Dock, were fairlv steady, and Huddart Parkere at 48/3 showed a rise of 2/3 since the last sale in July. Marthas Go Lower. Lacking the support of the Barrier and I other outside business, turnover in the 1 mining station was particularly small, being confined to Jjalf a dozen sales. Con- • spicuous amongst these were transactions in Marthas at 11/ and in Waihi Invest- 1 ments at 8/6, the lowest levels that have , been accepted for these once-popular 1 shares. Dominion issues. Business .in miscellaneous Dominion issues was confined to a gmall list repre- 1 sen ting just over a dozen separate enter- , prises. Amongst these, Auckland Gas with sales at 20/9 and 20/6, with buyers still in at the lower figure, Farmers' Trading at 19/9, New Zealand Drug at 70/6 and New Zealand Breweries at 41/9 were steady. Wilsons Cemente were easier and offers to sell at 17/9 failed to bring any buying offers. Dominion Breweries were easier with sales of the ordinary shares at 31/ and 30/9 and of the lights to the new issue from 4/8 to 4/, prices that seem particularly attractive in view of the company's earning capacity. There was an accession of interest in i oil shares, with customary fluctuations, j Taranakis sold from 14/ to 12/1, then back to 12/11, while Moturoae had business at 5/2 and 5/3. Some Company Reports. ( Accounts published during the week ' included those of Milne and Choyce and ( C. L. Innes and Company. Milne and Choyce have evidently had a highly successful year's trading, the accounts providing further evidence of the general soundness and profit earning capacity of { • this old-established firm. It is in keeping i with the traditional conservatism of the f directors in financial matters that the 1 [dividend rate has -been retained at 5 per 1 'cent, whereas a higher distribution could 5 | have been made. S : C. L. Innes and Company also disclose satisfactory returns, and although net ? profits are slightly lower they are paying * the usual 8 per cent per annum dividend J on both ordinary and preference shares, subject iu the case of the latter to the 4 [statutory deduction of 20 per cent. These * dividends are payable on £11,364 worth of bonus shares which have been issued during the year. No lees than £8880 was spent in the twelve month* on new buildings and plant. At the annual meeting of the Whakatane Paper Mills a very full explanation of the company's finances and prospects was supplied by tne managing director, Mr. H. A. Horrocks, who stated that the I company hoped to go into production in p November and make deliveries in Janu- C ary. The delays that have taken place 4 in this regard have had the effect of 1 weakening the market, and the prefer- e enc-o shares were on offer at 8/3, and the ordinaries at 4/. r