COMMERCIAL Quarterly Review Of Sharemarket

Press, Volume XCVIII, Issue 28939, 6 July 1959, Page 16

COMMERCIAL Quarterly Review Of Sharemarket

The second quarter of 1958 was a crucial period in the post-war history of the New Zealand economy. Falling overseas prices had caused a balance of payments crisis and, as Budget day approached, economists, businessmen and political commentators prepared to tighten their belts. ■ By contrast, the .second quarter this year has brought news of buoyant overseas reserves and higher prices for New Zealand exports, and a forecast by no less an authority than the Minister of Finance of a brighter Budget. The sharemarket fully reflects this change in the economy. Share prices took their steepest and longest fall in post-war history last year, falling nearly 10 per cent, between February and August. The recovery which began in January this year has continued ever since, with a slight check in March. Rising above year-ago levels for the first time in April, the path of share prices -has continued to diverge from their 1958 course and prices are now 7 to 10 per cent, above June, 1958, levels.

The recovery in market confidence was accompanied by a sharp increase in turnover. Recorded turnover of shares and rights in Christchurch exceeded 400,000—the highest figure for at least four years, possibly since the war. Turnover of Government stock and Ideal body and company debentures and fixed interest stock was also higher than usual, though the total of £140,000 has been exceeded in several quarters in recent years. “Equity-Consciousness”

Much of the increased turnover in shares probably stems from the new “equity-consciousness” of several classes of investors. Institutions are investing a higher proportion of their funds than in recent history in ordinary shares, and there is a growing band of small investors, many of them introduced to the sharemarket through investment clubs. In addition, some observers claim there is more overseas buying of New Zealand shares now than for many years. There is no indication of any diminuation of these factors now or for some time to come. Recorded turnover on the Christchurch Stock Exchange in sms’ ; nd ■*»<*• and ■-**’ Australian Shares Neglected A feature of last week's trading on the Christchurch Stock Exchange was the drop in turnover of Australian securities. Australian-domi-ciled shares in the miscellaneous section of the quotation list accounted for fewer than 5000 of the 30,000 shares traded, compared with 11,000 (of a total of 39,000) the previous week.

The approach of the New Zealand Budget no doubt accounted for this wary approach among buyers ol Australian shares. There has been considerable speculation on whether —or when—the New Zealand Government could block up this obvious loophole in its taxation-of-dividends legislation. Most classes of New Zealand-domi-ciled shares were in demand. Frozen meat, insurance, woollen, and miscellaneous manufacturers’ snares were mostly traded at higher prices. Characteristic of most days’ trading was a long sales list comprised mainly of small parcels. Details of transactions on the Christchurch Stock Exchange ia*st week, with figures for the previous week in parenthesis, are as follows: Government stock, £3980 (£5080): local body and company stock and debentures, £3OO (£3200); banks, 870 (259); breweries, 1098 (1485); frozen meat, 860 (51); gas, 300 (1472); insurance, 850 (650); loan and agency, 3120 (675); timber, 200 (200); woollens, 1518 (1720);. miscellaneous Australian, 4877 (11,023); miscellaneous, New Zealand, 10,253 (14,985); mining, 1100 (2152); unlisted, 4705 ( 4225); total, 29,751 (38,897). Government stock turnover was confined to two parcels. The yield on a parcel of 4',i per cent. June 1951 stock was £4 17s 8d per cent., and the yield on 3 per cent. 1963-65 stock £4 14s lid per cent. Commercial Bank of Australia preference had first business for some time, selling at £5 15s. Hay’s preference (18s 6d) were steady. Commercial Bank of Australia ordinary, improved to sell at 17s 3d. M. ami A., had first business for some time, at 32s 3d.

N.Z. Breweries Firmer New Zealand Breweries jumped suddenly on Friday to sell at 39s 6d. after earlier .dealings at 38s, unchanged. Ballins were steady at 355. The frozen meat section was very firm. In first recorded business 'since the settlement of the Islington dispute, New Zealand Hefngerating improved 3s 3d to sell at 375. canterbury Frozen Meat (£26) and Southland (675) also made good gains.

Christchurch Gas (18s 6d) and Wellington Gas (21s 9d) were steady. New Zealand insurance and South. British Insurance both made good gains during the week. New Zealand rose from 71s 9d, to 72s 6d. cum dividend, and South British from 76s to 775.

New Zealand Farmers’ Co-opera-tive shares all improved., tn sales or on quotation. The ordinary shares rose Is 3d to 13s 6d and the H prewrep9»*.lld to 13s 3d. National Mortgage A (7s) and B <7s id) were steady.

kmirt Timber rose slightly to sen at 17s 6d.

Woollens, Textiles Woollen and textile firms' snares mgap some of. the best gains ot tne tlS?' elt Bna Tex ’ ‘“•8. Australian (295), and Tekau iiS B’’ 8 ’’ J® 011 k» rosc ls - Timaru, 01a M in earlier sales) J 26s 6 ? > each ro* w - The unlisted Kaiapoi were steady at 26s a^ar^ ce <m the Christchurch ert in v<rf„^ he c ® n }P w ‘y « regwtero:!n in . vlctorla 1 and its operaung subsidiaries make bearings for the «*«««« indusfi 1 mZk 108 Bhares changed hands in Melbourne early in the week at hJ^,r, to u le l. d 31 P er cent - *»»! * r l?J. ch } , f c " bu ®iness was recorded gj 22 th iater sales at 42s 3d. a™ 4«is 3d. a n^A’.. (UP , 18 ?*«”• 6d) and , <«P. la at 54s Bd, with later XSSI? 8 !-! 548 6<3) roBe sharply (4ta o<n We J e 7 m . ade by oh « , a « nd ®’ Z ' I ndustrles (16s 3d ’.,’^ ter ,. l6e > unchanged). Australian retailers were again erratic. Cox Bro*. (5s 6d) Kid Waiunchanged, Heta Murray (Iffs iid> were firmer ana sold at 158 10d. 15s 9d. and 15s Bd, compared with the previous week’s close of l&s 7a.

N.Z. industrials t-i > n ? .J he New Zealand industrials traded lost ground. Gains were Blng Harns A (19s), Huntdividend, compared rt^-^a 81 ” 6 ? 8 1 , a , 5 l nionth at 30s, cum divuiend of lid), Coulls, Somerville (45s 6d), William Cable Hoia<sr«i 24s d i*i and M ilburn Lime (ZBs). Golden Bay (10s), John Chambers (20s), K.P. Drugs (80s 6d>, Mo reS l/ rodu s ts <26s 9d). Tip Top ice (13s 7d) and Wilsons Cemental 13s 8d) were unchanged. Fi^°VoL? winß <l3s ’ ana Ultimate Ekco (20s) reappeared on the sales 11st. Apex Ice, new, had lirst business at 60s.

Beaths (32s 3d) and Woolwortns, New Zealand (16s 9d). were firmer. Hays sold unchanged at 18s 6d. Waihi Investments were steady at 9s 6d.

Matea Forests sold unaltered at 4s Christchurch Press reappeared on the sales list, selling at £l3 ss.