COMMERCIAL Review Of Week’s Stock Exchange Transactions

Press, Volume XCVII, Issue 28697, 22 September 1958, Page 16

COMMERCIAL Review Of Week’s Stock Exchange Transactions

Trading on the Christchurch Stock Exchange last week held barely steady with the smallest volume of company shares changing hands since the fortnight after the Budget. Price rises totalled only 12, compared with 14 falls and 24 transactions at unchanged values. Trading in Government stock increased, however, to £64,015—a figure exceeded only twice this year.

A total of 13,847 .shares changed hands with buyers showing a preference for Australiandomiciled stock, which tended to be slightly easier. Banks continued to be in better business and the turnover was the best for three months. Breweries attracted more business but at lower prices with Australian brewery shares attracting interest. New Zealand retailers and industrials were traded in reduced numbers but the section showed a firming tendency.

Business was erratic throughout the week in terms of turnover of company shares, with large purchases of Australian-domiciled shares being made on Monday and Wednesday and a lift in the otherwise sluggish New Zealand market on Friday, providing the main fluctuations.

The ... .sharp ■ increase in the XtooerriiKgnt stock and local body -and company debentures was through several large parcels changing hands rather than the number of transactions for the week. Two lots, each of £20,000, were bought of gilt-edged securities and there were three other purchases of between £5OOO and £BOOO each.

Although many New Zealanddomiciled shares have lost value since the introduction of the Budget at the end of June, in no field has the fall in price been as spectacular as in brewery stocks. The increase in the price of beer to the consumer from the Budget has meant a sharp drop in total intake, and falls in sales by breweries. These falls have been reflected in the value of the stocks. Position '"Most Serious"

The general manager of New Zealand Breweries said in Wellington last week that, since the introduction of the Budget, production of bottled beer was down by 40 per cent., and draught beer down by 15 per cent. He said: “From the trade’s point of view the position is becoming most serious; few hotels have the financial strength to withstand the losses and if no action is taken soon the whole structure of hotels in New Zealand will collapse.’’ The statement said that the public might continue to spend £27m on beer as last year. The Government would take 10s 6d 'out of every £, against 7s 6d last year. Because of the decrease in bottled beer consumption, it is estimated that no new beer bottles will be required for two years, if the situation continues. The barley acreage for malt may have to be cup by 50 per cent. These estimates have been supported by bottle producers, who see a threat to their industry.

In the middle of March it was announced that an amalgamation would be effected between Ballins Breweries and New Zealand Breweries, and this announcement led to an immediate upsurge in interest in the stocks of these two companies. Ballins began the year in local trading at 34s 6d, rising to 41s 6d by the beginning of March. Ex scrip at 34s on March 7, the stock rose to 38s after the merger announcement.

By the beginning of April Ballins stock had again fallen to 345, and it fluctuated between 34s and 33s until June 25, when there was a lull in trading in this stock on the Christchurch Stock Exchange. The next local business in Ballins stock was not until July 22, when the fall in beer consumption was beginning to have its effect upon stock prices. On this day the ,stock was traded at 30s, and has since fallen to 295. In 1957, the stock was in business on the New Zealand Stock Exchange at prices ranging from 29s 6d to 365.

Wild Fluctuation A fluctuation even more wild has been -seen in prices paid for parcels of stock in New Zealand Breweries. On January 14, when the Christchurch Stock Exchange opened for the year, this stock changed hands at 48s 6d, rising to 53s 6d by mid-March. By the last day in March, the price had settled back again to 475. It was in the second quarter of this year that New Zealand Breweries’ stock showed amazing variations in price. It is doubtful whether any New Zealand stock has undergone such price changes in recent years. In April. May and June, the stock was in business in Christchurch on 33 of the 57 trading days. Early in April a slight recovery to 47s 9d was effected, but by May 20 the price had fallen again to 455. From 46s 6d paid on June

3 the local value rose to 55s 6d in less than two weeks. On June 12 the stock actually sold at 4s above the price paid in local business on the previous day, an appreciation of 8 per cent. At the end of June the stock had settled back to 53s 6d. By mid-August the stock was at 49s 9d and now, a month later, it is selling at 31s 9d. From 43s to 52s was the price range for this stock in Dominion business last year. The third large brewery company in the country, Dominion Breweries, has not shown quite as much fluctuation in the value of its stocks, but has also come down from 94s 6d to 735, including a fall of 7s in the last month.

Details of transactions in Christchurch last week, with the previous week’s figures in parenthesis, are:— Government stock, £64,015 (£4050); local body and company debentures, £3600 (£1500); banks, 1677 (1000); breweries, 950 ( 651); frozen meat, 10 (950); gas, nil (636); insurance, 350 (200); loan and agency, nil (3030); shipping, 800 (1600); woollens, 560 (900); New Zealand retailers and industrials, 2600 (5849); Australiandomiciled, 7000 (5240); unlisted, nil (305); totals, 13,847 (20,361). Gilt-edged Yields Yields to maturity on Government stock traded in Christchurch during the week were:—

Three per cent., 1956-59, £4 Ils 5d per cent.; 4g per eent., 1959, £4 7s 6d per cent.; 3 per cent., 1957-60, £4 7s per cent.; 32 per cent., 1962, £4 16s Id per cent.; 3 per cent., 1961-63, £4 12s 8d per cent. Union Steam Ship preference showed no change and were steady at 21s, the only trading in preference shares. Australia and New Zealand Bank opened fully firm and rose later to 39s 3d, and their B stock rose to 41s and remained steady. Commercial Bank firmed to 16s 9d, while Bank of New South Wales opened easier, firmed • to last week’s rates, and closed easier at £33 ss.

Breweries Easier Ballins Breweries opened steady, but eased later to 30s, and a similar trend was followed by New Zealand Breweries, which closed at 31s 9d. Dominion Breweries were weaker at 735. Tooths were in first business for the year at 445. Canterbury Frozen Meat, ’in the only business in the section, firmed to £22.

There was little business in insurance stock, and New Zealand Insurance opened weaker and steadied at 72s 6d.

In the only business in shipping stocks. Peninsula and Orient firmed to 365..

Felt and Textiles (N.Z.), nil paid (5s 6d) and Felt and Textiles (Aust.) (245) were steady, and Lane, Walker, Rudkin firmed to sell at 36s 9d.

Australian Domiciled Australian-domiciled shares were generally sold at lower prices. Broken Hill Proprietary opened weaker and was steady at 425. Ampol opened weaker but firmed to 13s lOd, and 1.C.1., A.N.Z. eased to 53s 6d. Cox Brothers closed weaker at 5s 6d, and Waltons Sears at 15s sd. G. J. Coles opened firm, but eased to a steady 16s 9d. Woolworths (18s) and A.C.I. (52s 3d) were firmer. Among New Zealand retailers and industrials. New Zealand Newspapers (39s 3d), New Zealand Packing Corporation (235), New Zealand Forest Products (19s 6d), and Andrews and Beaven (25s 9d) were firmer. Hay’s (23s 9d) and Farrier-Waimak (15s) were weaker, and Gillman Packaging (32s 6d). Kempthorne Prosser (77s 6d), Whakatane Board Mills (22s 6d), and Cyclone (32s 6d) were steady.