COMMERCIAL Review Of Week’s Stock Exchange Transactions

Press, Volume CI, Issue 29851, 18 June 1962, Page 16

COMMERCIAL Review Of Week’s Stock Exchange Transactions

IBy our Commercial Editor}

New Zealand shares were firmer in active trading on the stock exchange last week. The trend in both the leaders and the lesser issues was upward with insurances notably firm.

This trend was in contrast to the easing tendency among New Zealand issues the previous week and also to the easier trend in Australia and the further uncertainty on Wall Street.

Last week there were about three rises for every two falls; the previous week there were more falls than rises. The Reserve Bank index at 1358 for June 7 should have recovered some of the previous week’s nine-point loss last week.

National Insurance (up 3d). New Zealand Insurance (Is) and South British Insurance (is) all improved during the week. Dominion Breweries, Ballins Hotels and Taranaki Breweries contributing were all firmer. Ballins Industries, down 6d at Ils 3d. was the only firm in the liquor trade to show a loss during the week.

Gear Meat made a good gain to sell at 16s 6d in first ex dividend business. Waitaki Farmers’ Freezing were also firmer, but Canterbury Frozen Meat. Meat Packers and New Zealand Refrigerating failed to respond to recent higher prices on Smithfield Market.

Woollens were again firm. Gains by Alliance, Manawatu Knitting. Tekau, Wellington Wool and Ross and Glendining outweighed small losses by Kaiapoi and Lane Walker Rudkin. During the week directors of Bruce Woollens disclosed that the recent bidder for the company’s shares was Alliance Textiles. Worth 10s 9d? The offer in shares and cash was equivalent to about 10s 9d for each Bruce share, sold as low as 7s 6d in the last three months. Bruce shares have risen from 8s 3d to 9s 3d since the bid was made and buyers are, no doubt, hoping for a new issue on terms which will justify the rejection of a 10s 9d offer. Bruce directors, in a letter to shareholders, said they agreed in principle that rationalisation within the woollen industry could eventually benefit shareholders staff and the consuming public, but after giving the proposition full consideration they unanimously agreed that the present offer could not be recommended to shareholders as being in their best interests.

At the same time Alliance Textiles was also advised that any increased offer it might feel disposed to make, particularly if Bruce ordinary shareholders were given some form of cash option, would receive the board’s fullest consideration. Bruce directors said: “It will be appreciated that future years should show benefits from the expansion programme Bruce is at present undertaking. "On account of the period required to obtain delivery of new plant it must take time for such planning to be implemented, but the board is satisfied with progress so far.” “Very Proper” The directors added that they appreciated the “very proper and courteous” manner in which the Alliance approach was made and record that discussions were on a “friendly and helpful plane.” Further rationalisation in the woollen and textile industry along the lines represented by the merger of firms in Alliance Textiles appears desirable. Theft are no fewer than 15 companies listed in this section of the quotation list as well as at least two "miscellaneous” listed firms and several unlisted firms manufacturing textiles in New Zealand today. Many of these firms are competitive and if their numbers were reduced by

amalgamation they could lower costs and prices with consequent benefit to shareholders and public. In spite of current difficult conditions in the building industry an optimistic view of prospects was taken by investors in most companies connected with the industry Rises ■were made by Carter Consolidated. Fletchers, Floor Tiles, Golden Bay. Milburn PTY.. William Cable and Clarke Petrous. Directors of both New Zealand Newspapers and Truth (New Zealand) referred last week to lower revenue from advertising in recent-months The chairman of Wilson and Horton commented on increasing competition in the printing industry. Although New Zealand Newspapers profit was lower, dividends paid to shareholders rose from £119,680 to £132,420. Capital was increased during the year and the latest result is equal to 11 per cent, on the old capital, compared with 10 per cent, the previous year. Premium The premium on Australian shares eased from 10 per cent, to 9 per cent, last week The premium paid on several individual issues ranged up to 12 per cent., but there were fewer instances of this than in the previous week. On Melbourne Stock Exchange last week industrial shares opened the week on a firmer note, but eased towards the close of trading with buyers becoming hesitant, according to a Melbourne cable. Turn-over fell to its lowest point for the year. Rises and falls were in balance and price moves were only small. Some good company announcements failed to lift the trading tone. Consolidated Zinc and Rio Tinto announced a merging of interests. 1.C.1.A.N.Z. reported higher profits for the halfyear, G. J. Coles sales and profits have reached budget estimates and British Tobacco is to spend £1 million on factory expansion in Victoria.

When trading ended for the week leading stocks like B.H.P, Consolidated Zinc. John Lysaght and Myers were selling cheaper than opening prices, while Colonial Suger, Herald and 1.C.1.A.N.Z. showed gains. London stock markets stood up reasonably well to the renewed weakness on Wall street during the week, according to a London cable Widespread losses were recorded but these were usually small compared with those sustained in New York Markets suffered an all-round set-back on Wednesday after the previous day's sharp fall on Wall street, but the subsequent falls on Wall street had little further effect. Industrials recorded widespread declines under American influence but the losses were sustained early in the week. On the last two days industrials resisted the persistent fall in New York and held very steady at the lower levels. Stock Yields There was a slightly firmer tone for short-term Government stock, but medium and long term showed little change. Averag' short-term yield was £4 14s Bd. average

medium term £5 3s 4d and average long term £5 4s 6d Yields to maturity on Government stock traded in Christchurch las* week are: 41 per cent. 1962-63. £4 Us per cent.: 4j per cent. July 15. 1963. £4 12s 9d per cent : 41 per cent. June 15. 1965. £4 17s 7d per cent.; and 5 per cent. 1973-75. £5 5s 8d per cent.

Turn-over in Christchurch last week was:—Government stock. £2200 (compared with £3910); local body and company stocks and debentures, £3575 (£2200); preference shares, 8000 ( 5500); banks. 310 (10>; breweries, 15.995 (5300); building societies, 200 (140); frozen meat. 800 ( 3000); gas. 1266 (nil); insurance. 4875 (3790 i loan and agency 2452 (4887); shipping. 384 (200); woollens and textiles. 4660 ( 3200); miscellaneous (Australian), 8550 (7500); miscellaneous (New Zealand). 16.735 (21.682); mining, nil (700); unlisted, 1500 (1234); total. 65.627 <52.193)