STOCK EXCHANGE.

Auckland Star, Volume LXIX, Issue 226, 24 September 1938, Page 4

STOCK EXCHANGE.

INVESTMENT METHODS

MAKING A MARKET

NO I'L'sS OK BOTHKR

In the heart of the city—actually in the basement of the Xew Zealand Insurance Company's fine building in Queen Street--the members oi the Auckland Stock Exchange meet. Three times a day a stream of brokers mingles with the city crowds passing along t.ic ground floor of the building.

Although outsiders are not admitted, the representatives of the Press are. and through the newspapers the public are informed of the result* of the discussions, epitomised in the daily share lists and sales. The premises, though excluded irom daylight, are well lighted- and admirably furnished. Calls are held at 10 a.m.. 12.15 p.m. and 3.13 p.m. on all week days except Saturday, when, with an eye to the golt course and other week-end attractions, the onlj call is at 9.30 a.m. Always Punctual. Punctuality is a keynote in the brokers methods. Take the midday call as an example. A visitor peeping through the folding glass doors at 12.10 p.m. might see a "Star" reporter and a single "early bird" —a dull outlook. \et at 12.15 the benches would be full, representing an attendance of 25 to 30 members, awaiting the sound of the gong from the chairman. Mr. <i. K. Buttle, at the raised platform in front.

"How docs the cull proceed?'' is the natural query from the man in the street. It may be caid at once that if a wool sale represents the maximum of excitement and turbulence, a Stock Exchange call is at the other end of the scale, for quotations are called and business done with a serenity and decorum that would not be out of place in the drawing room. Actually the call id made by the secretary. Mr. X. Laird Thompson, who calls the name of the scrip and invites bids from buy cm and from sellers in turn. Their responses come quickly, and close 011 two hundred separate issues are dealt with in from 15 to 20 minutes. Alert Brokers. A layman listening in might easily the impression that the bidding is to an extent perfunctory, but if he watched closely he would soon realise that there is no body of men in the city more alert than these brokers. The moment an offer is voiced that is acceptable to another broker, the word '"right"' shoots out instantaneously almost before an ordinary listener would realise that the quotation had been made. Yet despite this keennese there is no discourtesy; no attempt to take advantage of a member's inadvertent slip, for the Exchange as a whole is jealous of its reputation, and conducts its business on a high standard, with proper consideration for its clients and its fellow members. And so the members carry on their daily occupation so quietly and unobtrusively that few people would realise the extent and importance of its operations. At this time, when various adverse factors are restricting investment, the occupation of a stock broker is not particularly lucrative. However, taking the year as a whole, good times with the bad, the turnover of Auckland brokers runs into very large sums of money. Quite often thousands of pounds' worth are dealt with at a single call, and one or two of the principal firms have an individual turnover exceeding a million pounds.

It might appear to the layman that the brokers' commission, admittedly a small percentage, is easily earned, but such a notion ignores some vital facts. Apart from renting an office and keeping a staff commensurate with the magnitude of his operations, the broker who desires to keep thorough!}- abreast of the market cannot afford to be squeamish in regard to the dispatch of telegrams, cables and telephone toll calls. The bill for those items alone, in the case of the bigger firms, which keep daily contact not only with all New Zealand centres, but also with Sydney. Melbourne, London and New York, runs into hundreds of pounds a year.

On the whole, the results must be profitable. for anyone desirous of becoming a member would find it necessary to pay several hundred pounds for a seat, besides complying with a rigid and searching scrutiny by the committee as to bis suitability for membership. However, apart from actual 6ales. the most valuable function of the Exchange is that it provides a definite market for all the leading securities in the Dominion. Its daily quotations are scanned with the closest interest by all classes of the community. from the housewife, who has her own special investments, to the Minister of Finance, who is of necessity compelled to watch the market trend in connection with public financc.