THE WEEK REVIEWED.

Auckland Star, Volume LXX, Issue 17, 21 January 1939, Page 4

THE WEEK REVIEWED.

BRIGHTER TONE. GOVERNMENT STOCKS IN DEMAND. BUT FEW SELLERS IN SIGHT. INDUSTRIALS UNCERTAIN. Although turnover on the Auckland Stock Exchange for the week which ended last night was not heavy, there was a substantial improvement when compared with the first few days after the Exchange reopened. Not only did business increase towards the close of the week, but what was more important, there was a much stronger inquiry from buyers. Ihe firmer note was especally marked in the case of Government stocks and local body debentures. Before the holidays these were largely neglected, with tiie consequence that quotations fell to bargain prices. Week after week it was pointed out in these columns that the i market was unreasonably low and that an advance was due at any time. However, | buyers persistently stood off, but it only required a slightly stronger front by holders to bring about a radical change. Apparently this change is now in operation. At the noon call yesterday there were buyers for 18 separate issues of Government bonds and stocks, with only one seller in sight, and he askied par for 46/49 4 per cents, which sold before Christ mas at £90 10/. Turnover in this section was not heavy, for the simple reason that sellers were absent, but any parcels that came on the market were promptly snapped up. It will be surprising if the present upward movement is not carried further. The same trend was noticeable with regard to local body debentures, but in a lesser degree. Bank Shares. The banking section was rather quiet, with attention chiefly directed to New Zealand®, which after a steady market in recent weeks at £2 eased slightly with final sales at 39/9. Nationals were little changed, with business ex div. at 48/0, more being available at that figure. There was only a moderate demand for Australian banks. New South Wales sold at £31, which compares with a sale in Sydney the day bet'ore at £1 less. Mining. In the mining class fair attention was given to the Waihi group, and there was business in Marthas, Waihi Investments and in Grand Junctions, with a firm market in each case. Grey Rivers were active in the south, but offers to sell locally at 18/6 failed to attract any buying offers. During the week practical evidence of sympathy on the part of the Government in local mining enterprises was given in the announcement of subsidies to the Golden Dawn and Una Consolidated companies, which have, in consequence, been able to resume operations. If the Minister could see his way to announce the removal of the foolish and iniquitous gold export tax he would earn the gratitude of all who are interested the welfare of the mining industry. No other single act would be so effective in stimulating the production of gold in the Dominion. Australian Securities. There was a steady demand for popular Australian industrials, but there was no particular zest in the bidding, and towards | the end of the week most values eased. Broken Hill Proprietary started the week at 58/9 and finished up a shilling lower, while British Tobaccos sold front 50/3 to 49/9. Imperial Chemical prefs. were firm, with business at 24/, and Electrolytic Zincs, which changed hands at 47/, also had a strong market. Glass shares failed to hold the record levels recently established, and yesterday the market lay between £5 7/ and £5 12/6. A week ago lowest sellers were asking £5 18/. Dominion Industrials. Though the market is still seriously disturbed over the probable results of the Government's import regulations there were signs of a better feeling towards particular stocks which might be in a position to benefit from a change in the tread of trade. So far the indications are for a preference on the part of buyers for a selected circle of local manufacturers. Gas shares have improved, but this is probably the customary reaction to the near approach of the dividend date. In this connection it is satisfactory to note that the first of the big companies to publish its annual accounts, Wellington, shows profits only slightly lowertlian those of the previous year and the usual dividend is to be paid. Consolidated Bricks have been in keen demand at 8/, and the inquiry for brewery shares has livened up with New Zealands selling up to 40/5, a rise of 1/11 in the week. Wilsons Cements were steady at 15/10, but a number of securities which were in popular demand before the Government instituted its measures for business control, notably, Farmers' Trading, are still being neglected. Rightly or wrongly, there is a strong feeling amongst investors that the latest legislation will seriously curtail the operations, and consequently the profits of many leading enterprises. For this reason the result of the pending conference of business representatives with the Hon. Mr. Nash will be awaited with especial interest by many intending buyers of New Zealand stocks.

TREND OF MARKET. The following table indicates the fluctuations in the values of various securities:— Dec. 22. Jan. 13. Jan. 9. 1937. 1038. 1039. £ s. d. € g. d. £ s. d. A'asla ... 10 15 0 *9 17 6 916 0 Commercial 0 17 0 0 16 3 0 16 1 K., S. & A. 5 7 6 5 6 0 5 6 0 Nat., N.Z. . 2 15 0 fJ 8 6 2 8 3 Nat.. Anst. 700 700 *7 00 N.B.W. .. 82 17 6 30 0 0 31 0 0 N. Zealand 2 40 200 1196 Union ..066 8 13 6 8 12 6 MISCELLANEOUS. £ 8. d. £ s. d. £ s. d. VZ. Insnr. 3 3 0 211 3 213 0 S. British .*289 220 219 Golils, M. . 1 13 0 *1 0 0 *1 9 0 Brit. Tob. 210 6 210 6 299 Broken Ilill 3 3 0 217 9 217 9 Elec. Zinc 270 266 270 (pref.) 27 0 296 210 0 Aust. Glass 4 12 0 5 15 0 5 10 0 Mt. I.yell .1 10 9 180 180 Col. Sugar 47 10 0 48 10 0 48 5 0 Auck. Gas .1 10 019 6 019 5 Wilsons C. 017 6 015 10 015 10 N.Z. Brew. 26 6 1186 205 Dom. Brew. 119 9 1113 1116 Farmers' T. 1 0 0 018 4 018 4 GOVERNMENT STOCK. . £ s. d. £ s. d. £ s. d. 19E12-5.J . 102 10 0 97 0 0 99 0 0 1934-46 . 103 0 0 98 10 0 99 10 0 1953-57 . 98 5 0 '91 0 0 91 0 0 •Nominal. tEx. div. or interest.

LATEST SALES. Sales since last review have been as follows: — Banks.—New Zealand, £1 19/10 (2), £2 (4), £1 19/10, £1 19/9; Australasia. £9 10/; Commercial, 16/1; National, £2 8/6 (2); New South Wales, £31 (2). Insurances.—National, 15/6, 15/9, 15/7 (2), 15/6; New Zealand, £2 13/ (2); South British, £2 2/ (5). Government, etc.—Bonds: 15/11/38-41 3% per cent, £97; 15/6/52-55, 4 per cent! £99. Stock: 15/4/46-49, 4 per cent, £98, £98 15/; 15/6/52-55, 4 per cent, £98, £99; May, 39-52, 3% per cent, £97. Auckland Harbour Board, 9/7/52, £100 10/; 9/7/59, £99 10/. Waitemata County Council, 1/4/62, £100; Newmarket Borough Council, 1/6/40, £99 17/6; Renown Collieries, deb., £92. Mining.—Martha, 11/8, 11/6 (2), 11/7; Waihi Investment, 8/7 (2); Waihi Grand Junction, 3/3 (2); Mount Morgan, 10/5; Placer Development, £3 17/; Triton, 10/7. Australian, etc. —British Tobacco, £2 10/3, £2 9/9, pref.. £1 13/ (3); Broken Hill Proprietary. £2 18/9 (2), £2 18/, £2

.7/9, (con.). £2 5/; Colonial Sugar, £48 >0/, £48 5/; Dunlop-Perdriau, £1 1/8; Electrolytic Zinc, £2 6/6, £2 7/: 1.C.1., pref., £1 4/ (3); Woolworths, Sydney, second pref., £1 9/3; Woolworths Holdings, 15/4, 15/5, 15/3 (2), 15/1 (2).

Dominion.—Auckland Gas, 19/6 (6); Consolidated Brick, 8/ (3); K.D.V. Boxes (eon.), 3/6; M.K. Manufacturers, 7/10%; North Auckland Farmers, B pref., 8/6; New Zealand Breweries, £1 19/10, £2, £2 0/5; New Zealand Guarantee Corporation, 3/11; Renown Coal, 8/4 (2); Robini son Ice, £1 4/; Wellington Meat, 8/; Wily sons Cement, 15/10 (2); Auckland Farmers Freezing (5), £5 5/. RECOMMENDED. WOOLWORTHS (N.Z.), LIMITED. The shares of Woolworths (New Zealand), Limited, are recommended as a sound investment for the following reasons:— The par value is 5/, and they can be bought to-day at approximately 18/6. Last year's dividend was 16 per cent, giving a yield to the present purchaser of £4 6/6 p.c. p.a. This return would be insufficient if there were no other inducement to purchasers, but judging from the past record of the company there is every prospect of special bonuses becoming available from time to time. Actually the shares are cheaper to-day than they have been at any previous period since the company became firmly established. In past years substantial quantities of the shares of Woolworths (New Zealand), Limited, and also of the parent company. Woolworths, Limited, whose headquarters are in Sydney, have sold readily when the apparent yield on outlay was well under 3 per cent per annum. Even when the inducement was as low as stated the transactions have always turned out favourably to the purchaser. Remarkable Record. Woolworths (New Zealand), Limited, was formed in 1929 to conduct cash retail stores on the lines adopted by its parents, Woolworths. Limited, Sydney. During the first year of operations, four stores were established, two in Auckland, and one each in Wellington and Christchnrch. The capital at that time stood at £54,540, in ordinary £1 shares. From the outset the company's operations were successful, and even the intervention of the slump period failed to halt its consistent and rapid progress. At the end of its first year, 1930. total assets were £112,586; at latest bain dug they had mounted to £1,228,157. From four stores operating in its first year the number has grown to 20. Profits and Dividends. Net profits and dividends have been as follow:— Net Pref. Ord. pro; t. div. div. £ p.c. p.e. 1030 15,505 — 20 1931 19,240 9 15 1932 30,706 9 20 1933 42,383 9 20 1934 48,225 9 221 1935 60,104 0 14 1936 72,787 9 17J 1937 111,461 9 15 1938 125,212 9 16 Special Bonuses. Shareholders have had no cause for complaint. Dividends and special increments have come along in the style approved in chain store finance. Whenever fresh capita] has been needed shareholders have been given first opportunity to augment their holdings at moderate prices that have been well below market valuations. Moreover, in Octobcr, 1933, they received bonus shares to the value of £43,560 (four or five held), in August, 1935, £147,015 (three for two), in 1936, £98,010 (two for five), in 1937, £65,601 (one for 10), and on these augmented holdings liberal dividends have been paid. At the annual meeting held in December the chairman, Mr. C. Scott Waioe, stated that the directors intended to separate its freehold investments from its trading activities in a manner similar to that carried out by the parent company. A new company would therefore be formed to handle the properties. It is not unreasonable to expect that the flotation of this new concern will bring some special increment to existing shareholders. At the present juncture, with the effects of the Government's action in regard to tLj licensing of imports still uncertain, it is difficult to forecast the future of many New- Zealand industrials, but it is fairly safe to assume that the chain stores will obtain their requirements from some source or sources, buying as usual for cash on a mass scale in the cheapest market and using their customary effective methods to dispose of their wares. Though not generally known, it is a fact that the bulk of the goods sold by the leading chain stores in New Zealand are manufactured within the Dominion.