COMMERCIAL Review Of Week’s Stock Exchange Transactions

Press, Volume C, Issue 29621, 18 September 1961, Page 16

COMMERCIAL Review Of Week’s Stock Exchange Transactions

IBv Out Commercial Editor) Share prices in New Zealand showed a firmer trend last week than in any previous week this year. Both New Zealanddomiciled and overseas-domiciled shares made two gains for every loss over the week’s trading. Turnovers expanded with the firmer trend in prices. In Christchurch recorded business in shares and rights was the largest for four weeks, while Government and local body stock turnover was the highest weekly total for two months.

New Zealand shares opened the week on a slightly easier note, firmed on Tuesday, Wednesday and Thursday and closed steady. There was a steady trend in trading in overseas shares, apart from a firmer note on Thursday.

Thirteen New Zealand ehares made big gains during the week, while only four fell Is or more. There were four big gains and no sharp losses among the Australian issues traded. Peaks For Year Five New Zealand issues exceeded their previous highest prices for 1961. They were: Taranaki Breweries, United Building (Auckland), Andrews and Beaven notes and J. Wattie Canneries. Two other issues, Phillips and Impey and Williamson Jeffrey. regained their earlier

peak prices. Huddart Parker and Humes also fetched their highest New Zealand prices this year, and A.CJ. and Toppa equalled their previous highest.

New "lows” for 1961 were recorded by Mosgiel Woollens. British Office Supplies, D.1.C., Farmers Trading. Fletcher debentures. Motor Bodies, Smith and Brown, Tasman and Hellabvs. Southland Cement equalled their previous lowest price. Kauri Timber, Amalgamated Wireless and Email fell to, or below, their previous lowest prices for 1961. The week's trading could be summarised as a return of confidence in all sections, gilt-edged and equities, New Zealand and overseasdomiciled. The reappearance of buyers suggests that while prices have been falling, or unsteady at lower levels, in recent months, prospective buyers have been ready to jump in when they have satisfied themselves that the market has "bottomed.” September 7 was the last day for the payment of income tax instalments by many taxpayers. This probably helped to dampen down prices in previous weeks, and gave a lift to subsequent trading. Lowering of the trading banks' reserve ratios in the last two weeks helped the banks to finance their customers during this period of low liquidity. ' It is too early to claim that New Zealand share prices have finally recovered from their long decline, although the trend (as measured bv the Reserve Bank's index) has been steady or upward

for more than a month. One broker described last week’s market as “thin,” while several observers expressed surprise at the firmer trend. Firmer wool prices in Australia, and a fractional lift in Smithfield lamb prices the previous week, are the most favourable economic pointers jn the last week or two. But New Zealand’s balance of payments and overseas reserves remain unhealthy, and recent comments by economists have mainly been on the need to reduce inflation. If this diagnosis is correct, the longer corrective measures are delayed the more severe they will need to be. Overseas Markets After rising to record levels the previous week, Wall street prices “sagged heavily” on Thursday, according to a N.Z.P.A.-Reuter cablegram. "Losses dominated virtually every section of the list, including motor stocks, which had stood up well early.” The “substantial” fall mentioned in this message amounted to 1 per cent., as measured by the Dow Jones index. By way of comparison, the fall in the New Zealand index from the end of May to mid-July this year averaged about 1 per cent, a week.

London prices were still weak. Prices continued to drift, though there was a slightly steadier tone. The market there is exported to recover when the bank rate is lowered from its present 7 per cent. The demand for leading Australian shares on their home market was stronger than for some time, according to a Melbourne cablegram. Turnover increased and rises easily exceeded falls during the week. Commonwealth bonds were substantially higher, but mining shares were in less demand On Thursday, 13 of the more frequently-traded Australian shares were traded in New Zealand. These shares cost the New Zealand investors 9f per cent, more than Australian investors paid the previous day. Expressed in another way. £AIOO cost the New Zealander £NZB7 Bs. instead of the theoretical £NZBO.

The New Zealand premium on Australian currency has I varied between 15.8 per cent.: <in early January) and 6.6 per cent, (on July 6) this year. For the last month or so it has been fairly constant around 9 per cent. Gilts Lively Government stock was very active last week. Christchurch business of £lO,OOO was the largest recorded locally in any week since early July. The range of issues traded was one of the largest this year. Yields to maturity on most parcels were lower than in the previous week. Confirming the firmer trend in the gilt-edged market, the market closed with buyers for most issues, but very few sellers. Yields to maturity were as follows: 3 per cent. 1960-62, £4 15s 8d per cent; 3f per cent. 1962, £4 10s 4d per cent, and £4 13s 9d per cent.; 3 per cent. 1960-63, £4 14s 4d per cent.; 3 per cent. 1961- £4 12s 9d per cent.; 4? per cent. 1962-63, £4 18s 8d per cent, and £4 13s 9d per cent.; 3 per cent. 1961-64, £4 18s 3d per cent, and £4 17s 3d per cent.; 3 per cent. 1962- £4 15s 2d per cent.; 4| per cent. June 1965, £5 3s Id per cent.; 3 per cent. 196365, £4 12s lid per cent.; 3 per cent. 1964-66, £4 14s lid per cent.; 32 per cent. 196566, £4 19s Id per cent.; 4 5-8 per cent 1966-67, £5 Is 9d per cent., and 4j per cent. 1988-70. £5 3s 4d per cent. Details of transactions in Christchurch last week are as follows: Government stock, £10.060 (against £1250 the week before); local body and company debentures, £2700 <£4500); preference, 917 (1625); banks, 309 (668); breweries. 3300 (800); frozen meat, 1257 (600); gas, 200 ,2600); insurance, 1500 (1150); loan and agency, 535 (323); shipping, 1850 (nil); timber, nil (157); wook 2300 (2088); Australian miscellaneous, 15,460 (11,414); New Zealand miscellaneous, 16.453 (10,720); mining, 1600 (100); unlisted, 298 (3888); total, 45,979 (36,133).