Commercial News

Auckland Star, Volume LXXIV, Issue 304, 23 December 1943, Page 3

Commercial News

MORE CRITICISM CEILING SHARE PRICES EFFECTS IX AUSTRALIA Australian business men and investors continue to view control of the Stock Exchange, with the fixation of ceiling prices, with resentment, and at recent company meetings the chairmen have not minced "words in describing their feelings. '•Why such a harsh, restrictive and unjust administrative measure should be considered necessary or advisable in Australia, when no such action has been taken in any other of the United Nations or British Dominions, is utterly incomprehensible," stated Mr. Staniforth Ricketson, chairman of the Jason Investment Company, at the annual meeting. •One fails to see how Australia's war effort can be assisted in the slightest degree by compelling forced sellers to accept less than a just price for their shares, just as one also cannot imagine that the war effort would suffer a whit if a free market were operating. '"Looking across at our nearest neighbour, New Zealand, does not appear to be doing a bad job despite the fact that Broken Hill Proprietary shares sell there at 44/ G. as contrasted with the fixed price of 40/ in Australia, or that New Zealand investors pay £57 for Colonial Sugar, while Australian holders who have to sell cannot get more than £51 5/. In London, too, many of the Australian stocks have been selling at prices below their Australian equivalent without Great Britain's truly magnificent war effort being impeded in any way." Prejudices War I-oans "The fixed ceiling prices of shares in public companies listed on the Stock Exchange limit realisations to a very large degree, and it is very difficult to follow the reasoning which actuated the Federal Government In imposing these conditions for the alleged purpose of assisting Australia's war effort," stated Mr. T. H. Kelly, chairman of the Perpetual Trustee Co./ Ltd., Sydney. "The ceiling prevents sellers from getting a fair market for shares, does not divert funds into the War shares, does not make . any fresh funds available for subscriptions to War Loans. When investors buy shares the funds available in the community for subscriptions to War Loans are not thereby reduced. The shares and the cash merely pass from one person to another, and the amount of cash avauI able for War Loans remains the fame. "Grave Injustice" ■ "The ceiling inflicts a grave injustice upon all holders of shares in companies . affected by it, as it keeps the value of ■ those assets below the level at which they apparently would be saleable if the natural law of supply and demand were ' allowed to operate, and it unjustly penalises holders of shares who are forced to . sell, particularly executors. "Most of the present selling comes from • deceased estates in which sales have be- ' come imperative and the beneficiaries in ' those estates, both life tenants and remain- ' dermen, suffer unreasonably by the unjust i prices imposed by the Commonwealth I Government. The only benefit arising from • such artificially depressed prices takes the i form of a bonus to those buyers who are • lucky enough to secure the shares that '. are "sold because they buy them below . their true market value."