COMMERCIAL Review Of Week’s Stock Exchange Transactions

Press, Volume C, Issue 29699, 18 December 1961, Page 24

COMMERCIAL Review Of Week’s Stock Exchange Transactions

IB* Ow Commercial Editor} Uncertainty was the keynote to last week’s trading on the stock exchange—uncertainty about the Australian election result, and uncertainty about the likely course of share prices in New Zealand in the New Year. The volume of trading was again light The turnover of Australian shareti declined, but New Zealand industrials and retailers were more active than in the previous—abnormally quiet—week. Government stock and local body and company fixed interest securities were again neglected.

New Zealand-domiciled ordinary shares, convertible notes and rights made 26 gains and 29 losses over the week. The trend was steady to firm until Friday, when the market closed on a weak note. The previous week there were 29 gains and. 33 losses. In that week the Reserve Bank’s index of New Zealand ordinary shares rose 0.9 per cent.

Leading New Zealand issues were well represented among both the rises and falls last week. New Zealand Breweries, Canterbury Frozen Meat, National Insurance, New Zealand Insurance, South British Insurance, Bing Harris A, Hallen■tein Bros., Milburn Lime and Cement, Tasman, United Empire Box and Vtbrepac Blocks all made gains—mainly alight. None of these shares reached their 1961 peak prices. The falls included New Zealand Refrigerating. Wright Stephenson, Alex Harvey, DJjC m General Foods, George Court, Golden Bay Cement, Hay’s, Jas. J. Niven, L. D. Nathan, McKenzies, Forest Products, N.Z. Newspapers, N.Z. Paper Mills, Ross and Glendining, Ultimate Ekco, William Cable and Woolworths (N.Z.). Of these shares, Hay’s, Jas. J. Niven. McKenzies, N.Z. Paper Mills, Ultimate Ekco and William Cable were traded at or below their previous lowest prices for 1961. Australian Election While the sword of Damocles hung over Mr Menzies, the Australian investor —and even more so, the New Zealand investor in Australian shares—cannot be sure how the “play the market” The return of the CountryLiberal Party coalition would, in general terms, mean a continuation of the alow recovery of the Austra-

lian economy in 1962. No spectacular rise in share prices bad been envisaged, but most Australian observers predicted a steady rise in share prices next year if Mr Menzies was returned with a workable majority. Labour Party spokesmen in the election campaign promised early action to restore internal demand. A Labour Government in Australia would be much more sympathetic to local manufacturers’ pleas for protection by means of import control. Mr Caiwell had also promised a large injection of State spending to restore buoyancy to the economy. Such measures, with their inflationary overtones, would undoubtedly revive share prices more quickly. The annual meetings of the Wellington and Christchurch Stock Exchanges were held last week. These meetings traditionally provide a platform for the exchange chairman to review the year’s trading and discuss prospects for the coming year. The Wellington chairman (Mr A. W. Macarthur), commenting on the 15 per cent, to 20 per cent, fall in average share prices over the last year, said this was a “sure reflection of the parlous state of affairs in which we as a country find ourselves ”

Because we are nervous, said Mr Macarthur, “surely does not mean that we should listen to a lot of gloomy foreboding from our local pessimists.’’ The retiring Christchruch chairman, Mr Somers W. Cox, gave his listeners no valedict-

ory exhortation but concluded on a note of realism: *T would like to be able to say that we can look forward to the future of the New Zealand market with confidence, but with the uncertain future for our primary products, on which we depend so much, that is not possible.” Par Issue Woolworths (N2.) on Friday afternoon announced a long-awaited par issue. The previous two issues were made (in 1957 and 1960) at at premium of 100 per cent. The 1962 issue will thus leave the company’s large share premium reserve intact, but at least it is on more generous terms than the earlier issues.

Announcing the issue, directors warned shareholders not to expect more than 11 per cent, dividends "until the new capital is fully profitearning.” The two-for-five issue will raise ordinary capital from. £1,310,672 to £1,834,941, on which an 11 per cent, dividend will require £201,843. After deduction of the preference dividend, last year's consolidated profit covered this amount 1.3 times. It should not be long before the dividend is restored to the 12 per cent, paid for the last 10 years.

Rights to Whitcombe and Tombs’ issue of 250,000 10s shares at a premium of 10s came on the market last week. First business was written at 8s 9d.

Trading in Neill Cropper shares has not yet opened. It was incorrectly stated in this column last week that letters of allotment were in shareholders’ hands; so tar the only applicants for shares (apart from employees) who have received letters from the company are those who missed in the ballot.

The Meat Packers issue was closed last week, over-sub-scribed, after getting away to a slow start No announcement has been made of the results of the share offers by Jersey Investments or Paramount Estates. Gilts Weak The Government stock market was weak. Although a good range of stock was traded, parcels were mainly small, and yields tended to rise. Yields to maturity on Government stock traded in Christchurch were as follows: Four and a half per cent., 1962, £4 14s lid per cent.; 3 per cent. 1961-63, £5 Is 8d per cent.; 4J July 15 1963, £5 5s 6d per cent, and £5 2s 6d per cent.; 3 per cent 1962-64, £5 3s 2d per cent.; 4 J per cent. October 15,1965, £5 4s 8d per cent.; 3 per cent 1964-66, £5 3s 4d per cent.; 4J per cent. 1967-69. £5 5s 2d per cent.; 5 per cent 1973-75, £5 5s 2d per cent. Details of transactions on the Christchurch Stock Exchange last week were: Government stock, £3720 (against £6610 the week before); local body and company debentures, £ 1700 (£750); preference. 200 (200); banks, 420 (300); breweries, 1500 (3980); frozen meat, 950 (401); gas, 405 (987); insurance, IEOO (540); loan and agency, 1288 (556); woollens and textiles, 2300 (3648); Australian miscellaneous, 10,512 (13.627); New Zealand miscellaneous. 13,910 (6005); mining, 300 (50>; unlisted. 200 (432); total, 32,765 (30,726).