COMMERCIAL Review Of Week’s Stock Exchange Transactions

Press, Volume XCIX, Issue 29265, 25 July 1960, Page 20

COMMERCIAL Review Of Week’s Stock Exchange Transactions

IBy Our Cmmtrcial tailor I Thursday’s Budget cast its shadow before it on the sharemarket last week. The cloud on the horizon was expected to bring mildly beneficial showers—in contrast to the damaging storm of the 1958 Budget—and so it proved. Relaxation of capital issues control and of excess retention tax, and reinstatement of the special depreciation allowances were Budget measures of wide application in the sharemarket. In more general terms, the mildly inflationary character of the Budget stimulated investors’ Trading on Friday was active, and most New Zealand shares were steady or firmer. Rises exceeded falls by a wide margin.

The more pessimistic investors feared a capital gains tax in this year’s Budget, and were agreeably surprised at the omission. Hopes had been held (by consumers rather than investors) of a reduction in the taxes on liquor. The behaviour of the market on Friday, however, suggested that these hopes had not been a serious market influence: breweries shares were unchanged on Friday.

Perhaps the best feature of the Budget, from the investors’ point of view, is its moderation. Extravagant reductions in taxation, or increases in benefits, in election year could only have aggravated inflation and perhaps plunged the country into another exchange crisis. Now that Budget uncertainties have been dispelled, firms can plan with confidence for the remainder of the year. All. the indications are for buoyant trading in most fields. N.Z. Shares Active

Stock Exchange turnover often falls away markedly in the few davs preceding the Budget. This did not happen this year, though Christchurch turnover dropped from 51.000 shares to 45.000 shares. A feature of the week was the keen demand for sound New Zealand industrials. Although rises and falls were almost in balance over the whole of the market, there were twice as many rises as falls in the New Zealand section. Australian—and London—domiciled securities contributed most of the falls. Details of turnover on the Christchurch Stock Exchange last week, with figures for the previous week in parenthesis, are as follows: Government stock, £3250 (£ 3000); local body and company debentures and stock, £5550 (nil); preference shares, 1114 (750); banks. 1319 (1921); breweries, 450 (528); frozen meat, 260 086); gas, 100 (500); insurance. 505 (1000); loan and aeency, 6450 (8089); shipping, nil (250); woollens, 3290 (200); miscellaneous (Australian). 7800 (12.845); miscellaneous (New Zealand). 22.593 (21.485); mining. 800 (500); unlisted, nil (1800); total, 44.681 (50.954).

Government stock declines were confined to four issues. Yields to maturity were as follows: 4| per cent. June, 1961, £4 8s 7d per cent; 4} per cent. 1962-63, £4 9s lOd per cent; 3 per cent 196365. £4 9s 6d per cent; 4 5-8 per cent. 1966-67, £4 16s Id per cent. Bank of New South Wales shares were firm at £34 5s and £34 10s A.N.Z. Bank (435). C.B.A. (16S 6d), and National Bank of Australasia (18s 9d) sold at lower prices. Ballins Industries closed at 14s 3d. compared with the previous week’s 14s 6d. New Zealand Breweries maintained the previous week’s gains with sales at 80s. Dominion Breweries were firmer in Auckland business. None of the shares in this section reacted on Friday to the Budget. New Zealand Refrigerating made further gains to close at 41s. Christchurch Gas were firmer at 18s 6d. During the week a takeover bad for one insurance company was announced and directors of another company advised their shareholders not to sell in the * meantime. The offer of 60s a share for the ordinaries and of £5 a share for the preference shares in Dominion Life is a generous one and seems certain of acceptance. The ordinary shares had most recen t business on July 11 at 23s 6d. Takeover Etiquette Could no warning to Dominion Life shareholders not to sell their holdings have been given by the directors? Negotiations had surely been under way for some, time when the price was announced. Dominion Life is not a listed company so the Stock Exchange can scarcely take any action in this instance. The apparent disregard for shareholders' interests shown by the Dominion Life directors, however, might provide the occasion for a further warning by the Stock Exchange that it expects directors to give ample notice when a takeover is under negotiation. National Insurance were firmer at 43s 3d but N.Z. Insurance B were 3d down at 63s 3d. South British were steady. Dalgety dropped 2s to sell at 435. National Mortgage B and Wright Stephenson were -unchanged. Felt and Textiles (Australia) closed at the previous week’s 41s, on the eve of the announcement of the proposal to subdivide the shares, which should add to theit value. Felt and Textiles, N.Z, of which the market evidently expects more than a share split, rose a further Is to 755. Alliance Textiles recovered to sell at 15s 6d. Bing Harris 5s shares had first business in Wei-' lington on Friday at 8s 9d. The latest Bing Harris offer is still 3s 9d below the Alliance office; but a 7d rise in the market value of Bing Harris shares, or a 3d fall in the value of Alliance shares, would make the two offers equal in monetary value. Wooed by two suitors, Macky Logan might well disregard the slight difference between their respective dowries and choose between them on other grounds. Which will bring the better leadership. vigour and fertility to the union? To drop the metaphor, will Alliance or Bing, Harris make better use of the Macky, Logan assets? The Macky, Logan shareholders, guided by their directors with their intimate ( knowledge of the company’s af-

fairs, should use this criterion in making their choice. Australian Industrials Australian industrials were not so active in Christchurch trading last week. B.H.P. improved to 75s 6d during the week, and Regent Motors improved sharply to sell at 13s. Colonial Sugar declined to £7l 15s, E.Z. Industries to 19s and L. J. Hooker to 19s. Ampol, Ansett, British Tobacco and Repco had latest dealings at the previous week’s prices.

H. G. Palmer rose to sell at 16s Id. Cox Bros. (8s 9d), Coles (16s 9d), Reid Murray (14s 6d) and Waltons shares (12s) were easier, but Waltons rights recovered to sell at 4s 9d.

Substantial gains were made by several New Zealand industrials. Andrews and Beaven rights moved up to 6s 9d, though the shares w;ere steady at 335. Fletcher Holdings shares gained Is to 41s but the rights sold unchanged at 3s. i Other gains were made by Golden Bay (10s 9d), J. Gadsden (50s), K.P. Drugs (£6 Is 6d), Forest Products (40s 3d), N.Z. Newspapers (65s 3d), Norvic Shoes (20s 9d), Reid Rubber (475), Transport Nelson (8s 3d), Vibrapac (Otago) (23s 6d), Weeks (595) and Wilsons Cement (15s Id). Farrier-Waimak lost some of their recent gains in business at 20s. Tasman (295) and Whakatane Board Mills (445) were cheaper, in contrast to Forest Products. General Foods (18s 6d), Griffins (22s 3d), J. Wattie Canneries (39s 3d) and Wilson Malt (23s 6d) also declined. These firms are all food processors, but there is nothing in the current business outlook to suggest hard times ahead for the food trade. Steady prices were paid for Bunting, Cyclone, Donaghy’s rights, Frozen Products, M.C.P., Metters and William Cable. Hallenstein Bros, responded to the announcement of the bonus and premium share issues by rising a further 2s 6d to 53s 6d. D.I.C. (235) and Woolworths, N.Z. (17s) made more modest gains. Whitcombe and Tombs dropped back Is 6d from their peak price of 60s.