COMMERCIAL Review Of Week’s Stock Exchange Transactions

Press, Volume XCIX, Issue 29397, 27 December 1960, Page 13

COMMERCIAL Review Of Week’s Stock Exchange Transactions

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The year’s trading on New Zealand stock exchanges which closed on Friday was probably the busiest ever, and ■was certainly a record for share prices.

The greater activity of the sharemarket was due in some measure to the steady rise in prices for the greater part of the year, but, of more permanent significance w r as the entry of more investors, both institutional and individual

Prices in New Zealand reached a peak in the third quarter. Since the sharp break in the market in November prices have recovered unevenly, and most shares now stand slightly above their December, 1959 level.

In this review last year the broad relationship between share prices in New Zealand and the country’s terms of trade was discussed, with reference to the twoyear trough in share prices from mid-1957 to mid-1959. Warnings that the New Zealand economy could not insulate itself from overseas influences were sounded by several Stock Exchange chairmen in their annual reports this month.

The decline in New Zealand’s terms of trade in the latter half of 1960 has not been arrested, and the level of overseas reserves is again causing concern. Measures to preserve the country’s external, solvency are urgently needed, and must affect the sharemarket at least in the early months of 1961. Nouveaux Rentiers Another feature commented on last year was the increase in the number of small investors, both individually and through institutions. This trend continued in 1960- and there is now a "very large army of little capitalists,” in the words of the chairman of the Wellington exchange (Mr J. A. H. Symes). The testing time for these “nouveaux rentiers” has now arrived. Until September of this year the newcomer to the share market could, with average luck and the scantiest knowledge of the principles of investment, buy a small parcel of shares which would show a paper profit in a few months. If he bought New Zealand shares in January, 1958, he was probably showing a profit of 36 per cent or so (apart from dividends) by September this year The market broke in November and the 36 per cent profit was reduced to 24 per cent, in two months. (Australian shares fell even more spectacularly in New Zealand —from an index figure of 122 to 102 in three weeks.) Prices have recovered slightly, but the market was uncertain up to the close of trading. What effect will the recent sharp fluctuations have on the membership of newly-established investment clubs and unit trusts, and the hundreds of “lone wolf” small investors? If the majority try to “get out while the goijig is good,” the net effect will be to depress the market—just as surely as the weight of their buying in 1959 and the greater part of 1960 added to the upward impetus of the market There is reason to believe, though, that many of these “nouveaux rentiers” are long-term holders, prepared to ride out a period of depressed prices. The coming months will show whether they or the weak holders are the stronger forces in the market Uncertain Close The market closed on an uncertain note. Business last week was practically confined to New Zealand issues and Australian shares were neglected. Details of transactions on the Christchurch Stock Exchange last week were as follows: Government stock, £7OO (compared with £7lOO the previous week); local body and company debentures, nil (£400); preference shares, 500 (1091); banks, nil (759): breweries. 4200 (3585); building societies, 200 (1100); frozen meat 1030 (300); gas, 100 (100); insurance, 2095 (1262); loan and agency, 3967 (8001; shipping, nil (100); timber, 400 (2001; woollens and textiles, 3251 (5300): miscellaneous (Australian), .4205 *7223); miscellaneous (New Zealand). 9558 *9225); overseas listings. nil (250); unlisted, 1800 (2239>; total, 33.306 (33.554). Only two parcels of Government stock were traded last week in Christchurch. The 3} per cent. 1962 stock changed hands at £9B 17s 6d to yield £4 9s 5d per cent, and the 4? per cent. 1965 stock at £lOO 15s to yield £4 13s 3d per cent Wool worths New Zealand Properties preference were steady at 21s 9d and William Cable C preference were slightly easier at 21s. New Zealand-domiciled shares were mainly firmer last week. Most interest centred on the stocks concerned in current takeover bids. Forest Products were easier, selling at 36s 9d. and Whakatane were Is lower at 665. K.P. Drugs nosed ahead (of Wright. Stenhenson in the contest for Dominion Fertiliser Until further details are avail-

able of the proposed bid by the newly-formed South Island Farmers’ Co-operative Fertisiler Company, Dominion Fertiliser shareholders can reasonably confine their calucations to the K.P. Drugs and Wright, Stephenson offers. On last week’s closing prices of £6 2s 6d (up 12s 6d) for "K.P. Drugs and 56s 9d (down 6d), for Wright, Stephenson the K.P. Drugs offer is worth 73s 6d and the Wright. Stephenson offer 71s.

Dominion Fertiliser had first recorded business since the two bids were announced, at 655. N.Z. Gains Westland Breweries rose Is to sell at 30s, Canterbury Frozen Meat 5s to £32 ss, New Zealand Refrigerating 2s to 455, Christchurch Gas 3d to 19s. New Zealand Insurance 6d to 695, Wright, Stephenson convertible debentures 3d to 40s 3d, Alliance Textiles 3d to 16s, Lane. Walker. Rudkin Industries Id to 15s 3d and Mosgiel Woollens 3d to 19s 9d. Other gains by New Zealanddomiciled shares were: A. S. Paterson, Is to 375; Early Bros., 3d to 7s 9d; Hay’s, Is 6d to 43s 9d; and G. H. Scales, 5s to 27s 6d. New Zealand Breweries fell 3d to 13s 4d South British Insurance B were 6d down at 54s 6d. but the old shares were steady at 55s 6d. Farrier-Waimak fell 3d to 20s 6d, Fletchers 6d to 42s 6d and M. O’Brien 5d to 7s Id. E.Z. Industries made the best sain among the Australians, closings Is up to 17s 9d. Australian National Industries fell Id to 5s 9d. Colonial Sugar 45s to £62 and Caranark 4d to 6s 9d. B.H.P. sold ex bonus at 53s and 545, nrevious cum bonus business at 83s 6d was equivalent to 55s Bd. Coles were fractionally firmer at 13s 2d. Reid Murray fell 5d to 8s 3d and Woolworths Id to 13s.