THE WEEK REVIEWED

Auckland Star, Volume LXX, Issue 29, 4 February 1939, Page 4

THE WEEK REVIEWED

A DULL PERIOD. UNSETTLED CONDITIONS. MARKED POLITICAL REACTIONS. ■ GOVT. STOCKS CLOSE TO PAR. l Only a moderate turnover was recorded ' on the Auckland Stock Exchange during 1 the "week which closed last night. There - were plenty of inquiries, it is true, for i yesterday's quotation -lists showed buyers for over 150 different issues, but except i.n a few special lines, there was little ; zest in the bidding, and buyers had their • limits marked down almost as- rigidly as ' those of the gentlemen from abroad who | attend and bid at our wool sales. ' This attitude of holding out for bargains was especially noticeable in the case ; of Dominion miscellaneous securities. To : an extent this policy is justifiable. No • one but a sublime optimist will expect • New Zealand companies to show the same • range of profits from now on as have • ruled over the past two years, and if dividends are reduced, as many probably will be, the investor will naturally expect to buy the scrip cheaper. During 1939 manufacturing and all other costs, both public and private,'will in the aggregate be higher than in late years. Turnover is likely to show some reduction, except in special cases, for the national income obtainable from our surplus of exports will be less by several million pounds. This is not to say that well established companies will not continue to conduct a reasonably prosperous business. Such enterprises came through the 1033-35 slump without having their structure seriously impaired and. provided the Government gives them half a chance, they will certainly 'surmount such difficulties as- may be ahead. Pessimists should remember that from the national aspect the country is much better situated to-day to withstand a temporal*}' recession in business than it was at the time of the slump. Only gross mismanagement on the part of the Government could force a state of'affairs at all comparable with those existing in 1932 and 1933 when exports averaged under £40,000,000 per year, compared . with £00,000,000 in 1937 and approximately £60,000,000 last year. As has frequently been emphasised in these columns, no Government can ensure the prosperity of the country which is chiefly dependent upon external influences; in other words, upon the revenue it can get from exports; but any Government can put a spoke in the wheels of commerce and make it difficult for that delicate and complicated organism to function to the best advantage. It is fear of investoi*? in this direction largely responsible for the caution with which they consider the matter of investment in local enterprises. Actual business in purely Dominion lines was small and was less comprehensive in scope than was the case the previous week. Values were either stationary at recently reduced rates or further reductions were noted, the sole exception being in Kaiapoi Wool, which at 10/6 showed a threepenny rise. Gas shares were steady but quiet, and Wilsons Cements dropped back from 15/10 to 15/6. Best offers for By crofts were at 34/, for Farmers' Trading 17/9, for Gear Heat 12/, while Macky Logans were available at 20/6 with no buyer in sight. A sale of Whittome, Stevensons at par suggested a favourable reaction to the Government's policy of giving preference l to local industries. The brightest spot of the week in regard to local industries was supplied at the annual meeting of Berlel (N.Z.), Limited. The company has paid a dividend of 17% per cent for the year that has just closed, and at the annual meeting the chairman of directors, Mr. J. Gentles, told shareholders that 7by increased turnover the company, had been able to take care of the added costs that had to be met. Fixed Term Securities. The marked preference shown for Government stocks and approved local body debentures that has featured the market since the Exchange resumed business after the Christmas-New Year vacation, continued and values were very firm all the week. Turnover was limited by the scarcity of sellers, and it is evident that only moderate supplies of four per cents arc now available at anything under . par. There was a steady demand for Auckland Harbour Board and Auckland City Council debentures, but there were very few sellers, and the only business put through was a parcel of City 4%'s, which changed hands at £1 above par. Bank of New Zealand Steady. Very little interest was taken in Australian banking shares and business in this section was almost solely confined to New Zealands, which steadied after the recent easing, and sold freely between 38/4 and 38/7%, finishing up the week at last week's level of 38/6. These 6hares 6old in Sydney yesterday at 36/. Insurances In Demand. After Government stocks insurances were again most favoured by buyers. | Under a steady demand New Zealands moved up to 55/' and South British to 44/ C, with a single parcel priced l%d j higher. Australian Issues. ' As is usually the case, Australian seeiirifollowed very closely the' trend of affairs in America, Britain and Europe. Prior to Hitler's speech business was almost at a standstill. When it became known that there were no unpleasant surprises in a characteristic utterance by the German leader, the market figuratively heaved a sigh of relief, and put . the Spanish war and its implications temporarily in the background and scanned the horizon for suitable investments. The changed attitude was strikingly shown in the quotations for British Consols and stocks, ail of wliich showed sharp rises. The metal markets, too, improved, and in sympathy with these movements Commonwealth industrials. which had dropped several shillings early in the week, reverted to normal before the close. Actual business was restricted to the more popular lines and the only special movement was in Wool worths (Sydney), which had increased interest and sold from 21/11 to 22/5, with more buyers in at the higher 'figure. Mining. There were no special features in the mining class. Broken Hill Souths were easier and at 27/ showed a drop of 1/6. Mount Morgans were placed early in the week at 10/1%, but improved at the close with business at 10/0. .The Waihi group were in steady demand, but holders were strong-and no business'resulted. LATEST SALES. Sales since last review have been as follows:— Banks.—New Zealand, £1 18/6, £1 18/7%, £1 18/6, £1 18/7%,-£1 18/6,- £1 18/7%, £1 18/6, £1 18/4, £1 18/6; New Zealand/D Mortgage, £16/ (3); Commercial, pref., £9 10/; New South Wales, £30 15/. • Insurances. —National, 15/9 (3)j New Zealand, £2 14/9 (2), £2 15/'(3); South British, £2 4/, £2 4/6 (3)', £2 4/7%, £2 4/6. • ■ V V . •' , Government, etc.—Stock: 15/4/46-49, 4 per cent, £99 5/; 15/6/52-55, 4 per cent, £99 5/; 15/5/49-52, '4 per cent, .£99, £99 2/G, £99 5/; March, 30.-43, 3% per cent, £99 10/ (4). City of Auckland, 1/4/43,. 4% i per cent, £101; Christehurch Trams, . 1/2/54, 4Y* per cent, £101 12/6; Amalga- j 1 mated Brick (Auckland), £100. j. Mining.—Komata Reefs,' 7/3; Maori! Gully, 6%d; Broken Hill South, £1' 7/;.; Emperor, 10/, . 10/1; Maant • Kasi, 4/3; I Mount Morgar.k 10/^PiO/9.

) Australian,- Etc.—British. Tobacco, £2 7/6, £2 7/2; Broken Hill Proprietary, £2 16/, £2 17/3, £2 17/9, £2 17/6; Colonial Sugar, £47 10/ (2); Electrolytic Zinc, £2 6/6, pref., £2 10/; G. J. Coles, £3 17/6; Kauri Timber, £1 3/, £1 2/9; IMorts Dock, 14/; Woolworths (Sydney), £1 1/11, £1 2/, £1 2/4, £1 2/5. Dominion. —Auckland Gas (con.), 12/6; Dominion. Breweries, pref., £1 15/3-; Kaiapoi "Woollen, 10/6; ililne and Choyce (debenture stock), 14/3, . 14/; National Electrical, 13/8; Northern Steam, 3/3; New Zealand Breweries, £2 . 0/9; New Zealand Drug, £3 5/3 (2); Taranaki Oil, 7/4, 7/3, 7/2; Union Oil, £1 1/3; Wilsons : Cement, 15/10, 15/7, 15/6; Wellington Gas, £1 11/; Whittome, Stevenson, £1; Electric Products, 15/; Wairakei, 7/. 5' TREND OF MARKET. G s The following table indicates the , fluctuations in the values o£ various securities:—

1 ; RECOMMENDED. ' ! 1 ! WOOLWORTHS, LTD. (SYDNEY). [ ' I AN AMAZING RECORD. The sharks of Woohvorths, Limited, are recommended as a sound investment for [ the following reasons: — . The company .is a highly prosperous concern which has engaged in the chain store business with exceptionally good results to . its shareholders. When its last accounts . were published about this time last year , it was stated that the new bonus issue . then announced would mean that an orig- ■ inal holding of £100 worth of shares would be worth about £26,000 without any effort by the investor. This was the fifth bonus issue of ordinary shares. An investor who bought a hundred shares at a pound each about 11 years ago and held them received three shares for one in 1928, one for one in 1931, three for two in 1034, and one for one in 1936 and one for five last year. How these benefits have been obtained can be seen by perusal of the following table showing net profits and dividends paid over the past decade:— Some Striking Figures. Net Div. Si Net Div. & profits, bonus, profits, bonus, £ p.c. £ p.c. 1929 22,187 25 1934 55.552 25 1930 3S,G!>3 30 1935 100,4 IS 12 J 1931 41,730 25 1.930 147,550 17J 1932 02,407 17J 1937 172.311 12J 1933 G5.783 22J 193S 217,717 15 Apart from profits distributed as dividends . and bonuses, there have been periodical gifts of shares. Of £1,113,998 of ordinary capital that has been issued, no less than £944,712 has come in the form of bonuses to existing shareholders. In addition, there were reserves at last balancing amounting to £378,000 without counting depreciation reserve of £170,887. Chain Store Methods. The company, from its headquarters in Sydney, and either • directly or through its subsidiaries, operates in all the mainland Australian States and in New Zealand. Everyday articles of a quick-selling kind bought keenly and sold in large quantities in. a standardised chain of shops, are the source of Wool worth earnings. Turnover is so speedy that storage, finmice, etc., are minor items. Good buying is of paramount importance, and specialisation in lines that arc low in price and small in bulk seem to be an essential to continued success. An attractive feature from the shareholders' point of view is that the slump periods failed to halt the progress of the company, whose methods make a special appeal to customers when they have to keep a tight hold on their purse strings. Present Position. At the present time the shares are worth approximately 22/9; there were buyers at the noon call yesterday at 22/5, with sell- ; ers asking 23/. The return on outlay to the investor based on last dividend is just oyer 3% per cent per annum,, but there is a good chance that some special : increment will be announced shortly. The • company closed its books on January 31, ' and the market in Sydney evidently ex- < peets a favourable announcement as the shares have advanced in price there dur- « ing the last few days. It is, of course, j necessary to draw attention to the em- • bargo upon exchange for the purpose of s obtaining the transfer of scrip from 1 Australia to New Zealand, but in the case 4 of Woohvorths this restriction is .of com- ' paratively little importance. Veiy large j quantities of the shares arc held in the Dominion- and any, buyer will have little > difficulty in obtaining his full require- ] ments, provided he is prepared to pay the 1 market price.

e Doc. 22. Jan. 27. Feb. 3. r 1037. 1030. 1030. 1 £ a. d. £ s. <1. £ s. d. s A'nsia ... 10 15 0 !) 13 0 *!) 15 0 3 Commercial 017 0 Dili 0 010 0 E., S. & A. 5 7 G 5 2 0 5 2 0 Nut., X.Z. .2 15 0 20 3 203 Nat., Aust. 7 0 0 0 15 0 0 15 0 " N.S.W. . . o~ 17 0 30 12 0 30 15 0 e X. Zealand 2 4 0 1 1§ 0 1 IS 0 0 Union .. 0 0 0 S 12 0 S 7 G ? MISCELLANEOUS. „ £ s. d. & s. U. £ s. d. G N.Z. Insur. 3 3 0 2 14 0 2 15 0 e S. British .*28023 5 2 4 0 - Colds, M. . 1 13 0 *1 1) 0 *1 7 0 1 Brit. Toll. 2 10 0 2 S 0 2 S 0 , Broken Hill 330 2 10 0 2 17 0 Elec. Zinc 270 2 5 0 2 00 (pccC.) 2 7 0 2 0 0 2 10 0 2 Aust. Glass 4 12 0 5 10 0 5 10 0 i* Mr. Lyell .1 10 0 100 170 1 Col. Sugar *47 10 0 47 5 0 47 15 0 j Auck. Gas . 1 1 0 0 10 0 0 IS 0 Wilsons C. 0 17 0 0 10 0 0 15 0 2 N.Z. Brew. 200 2 1 0 208 * Dom. Brew. 1 10 !) 1 12 0 1 12 0 t Farmers' T. 1 0 0 0 IS 4 ,0 IS 4 1 GOVERNMENT STOCK. & s. d. & s. d. £ s. d. 2 1052-55 . 102 10 0 00 0 0 00 10 0 ; 1034-40 . 103 0 0 00 10 0 00 10 0 . 1053-57 . OS 5 0 01 10 0 01 10 0 p 'Nominal. ,