THE WEEK REVIEWED.

Auckland Star, Volume LXXI, Issue 153, 29 June 1940, Page 4

THE WEEK REVIEWED.

WAITING FOR BUDGET.

SUBSEQUENT FIRM TONE.

DEMAND FOR GILT-BDOEDS.

The one factor which has overshadowed everything on the Auckland Stock Exchange this week, the Budget has had the effect of restricting dealings and lowering prices. When the ban was imposed on dealings in most overseas securities on Wednesday, June 19, values lor _ local issues rose appreciably for a limited market, despite the war, but in the past seven days the tone has been hesitant. Yesterday, however, when the terms of the Budget were announced, the market brightened. Judging from .Stock Exchange reaction, the Budget was not as bad as it might have been—or, indeed, as might have been expected. Values yesterday, though no higher, were no lower, and the noon call was an improvement on that of the morning. Business, however, was small. "Drastic, but not unreasonably harsh for a nation at war." was the comment on the Budget proposals of Mr. J. W. Frater, chairman of the Auckland Stock Exchange. "While withholding final judgment on the forced loan, my comment is that it may fall severely on the business man who needs money for his business," he continued. "To find the money necessary for the loan, a business man may have to realise some of his assets, and he will then be presented with a stock which is not marketable. Voluntary Loan Better?

."Had it been Possible. I would have liked to see a loan bearing a small rate of interest, which, being saleable, then Could have been realised if further capital was at any time needed. I> would have favoured a. voluntary, low-interest loan, with a compulsion clause held in reserve " Now that the Budget has been presented, and investors know the worst, it is possible that the coming week may see some improvement in the market. One point is that no Government loan hasi been suggested,' so there will be nothing to compete with existing Government issues. This may be -another factor making for improvement. Effect of War News. j

Any hardening of the market, of course, will be contingent on the war news. If the position deteriorates the market will drop— it has already dropped. But if the position, becomes better, or even t becomes no worse, the market should rally. That, indeed, has been the case in the past few weeks. , Market movements in the past two weeks are given in the following table. In each case the lowest sale figure is given: This week. Last week. Nat. Bank of N.Z. 116 6 116 6 Bank N.S.W 25 0 0 25 10 0 Bank of N.Z 118 3 118 6 N.Z. Insurance . . 213 , 9 214 9 South British Ins. 2 3 0 2 3 0 Dominion Brew. ~ 10 0 10 0 Wilsons Cement .. 016 0 015 9 Rural Bonds, 1947 103 0 0 103 0 0 Stocks ?«?S"SZ 3J p.c. 100 10 0 100 10 0 1040-49, 4 p.c. . 102 15 0 102 10 0 , Franklin P. 8., '' 1063, 4} p.c. 106 C'o 106 0 0 ■j.i? ot the purpose of further comparison the sale' price 'of certain of these issues a month ago is given:— of New Zealand, £1 19/; New Zealand Insurance, £2" 17/;., South British Insurance, £2 5/3Dominion-; Breweries. £1 11/; New Zealand Breweries, £1 11/9; Wilsons Cement, 19/3; Rural Bonds, £103: Stock, 1953-57, £100 10/;, 1040-49, £101 15/. '

This Week's Tendency. : The tendency this week on the market was the opposite of that last week, when the market was weak at the beginning and strengthened later on. This was the effect of the restriction of the market by the imposition of the ban on the quota- , tion of most overseas securities. At the I beginning of this week, the level was quite ' the equal of that on which the previous Week closed, but values fell progressively. ; An instance will serve to show the trend. ■■ ■•; The greatest number of sales of any one .: issue took place in Bank of New Zealands. V.Here are the sales in the order in which •""■ ™? y &°£ Place:—£2 0/3, £1 19/3, £1 < ffl/* ■"& *$£. &K £l 18 / £1 WB, £1 18/3 (3). New Zealand Insurances fell X from,£2 16/ to £2 13/9, and South British Insurances from £2 5/. to £2 3/, which was the level of the lowest sale last '■-. week. / -■'■ >, A comparison of the levels now and at tins time last month tells" its own story v For the sustained fall the War news has .:, been to blame. ... As was the case last week the most V popular section of the securities quoted •, as been gilt-edged stocks. Here levels 'arc relatively steady, though in the more favoured local body debentures the trend M upward. Franklin Power Board, 1963 '"' N i e Jj2, n V * or exnm P'e, advanced 5/ to ' £1065/, which is a high price for a stock which returns only £4 5/ per cent at par. Each local' body issue met with a buyer nt its first appearance at the.market. In ? .a11.,: there wei'e 12 ■ sales of local body f. debentures and eight more of Government issues, making 20 as a total. The number last week, when this section was also the ( most popular, was 22.

LATEST SALES.

Sales since last review are- - — Australasia., £8 10/; Nationa\ '..New Zealand, £1 16/; New South Wales, £25 (2)., £25 10/; Bank of New Zealand, £2 0/3,-£1 10/3. £1 19/. £1 18/9 (2), £1 - 18/6, £1 18/8. £1 18/3 (3); Union of Australia, £6 10/. Insurances.—New Zealand. £2 16/ (2), £2 15/, £2 J4/6, £2 13/9: South British, £2 5/ (2), £2 4/9 (2), £2 3/. Dominion.— Auctioneering (B prof.), £1; Auckland Gas (pd.), 8/6; Dominion Breweries. £1 10/, £1 9/ (2); N.Z. Breweries, £1 10/; Farmers' Trading, 17/; M.K. Manufacturers, 5/10, 5/9; N.Z. J>rug, £3 14/; N.Z. Newspapers, £1 6/6 <?l: Wilsons Cement, 16/; Woolworths (N.Z. pref.). £1 14/. .... ' Government Loans, Debentures, etc.— ' Bonds, 1953-57, 3'/ a Pr cent, £100 10/; , 'lirral Bonds, 11)47. 4 per cent. £103; BSffj itop-F?, 3 per cent. £100 10/ (2); 1; .,, 1938-41, 3% per cent - £100' 1046-40, 4 per ffl /V* 102 15 '> A 'H.B., 1001, m per cent, ISM Ay, . . ,

t. '!° •',; Auckland Electric Power Board. J? "-•• 4 * T>er tent, £101 10/; Auckland lainaw Board. 1048-34, 4'i per cent, £102 JO': Manurcwa Borough, 1961, 4% per cent, £103 10/; Franklin Power Board, 1963! *U per cent, £ IfKi 5/ (2), 10,)S, £105; W-ingnimi City, 1048, 4% per cent £102 • ' : Mount Eden. 1042-44. 4*4 per cent, £l"l '21; Amalgamated Brick (Auckland), 10-11. 0 per rent. £101 lit/; Auckland Gas. ■' )"•:■ .nit. perpet. stock, £100 I.V (odd