Review Of Week’s Stock Exchange Transactions

Press, Volume CI, Issue 29869, 9 July 1962, Page 16

Review Of Week’s Stock Exchange Transactions

IBy Our Commercial Editor J

. In the week after the Budget, generally reckoned as favourable to companies and investors, the New Zealand share market was in full retreat. There were 1.7 falls for every rise, the highest ratio this year. The Budget, indeed, provided for more generous depreciation allowances, export incentives and the abolition of capital issues control. It also extended by two years the period in which tax-free bonuses from pre-1957 profits may be made. It was this latter provision apparently which carried most weight with investors last week.

Turnovers were again near record levels with New Zealand industrials particularly active. Leading issues led the decline with about three losses for every gain.

The weakest sections of the New Zealand market were meat exporters and woollens and textiles.

Against the solitary gain of Meat Packers—6d trp at 9s after the report of a sharp lift in turn-over—the older firms’ shares were uniformly marked down.

Insurances showed little movement by the end of the week.

Bruce Woollens were active mainly at the previous week’s price of 12s 3d, but Alliance eased to sell at 15s. Bonds B, Felt and Textiles of New Zealand, Lane, Walker, Rudkin. Manawatu Knitting, Bing Harris A, and Ross and Glendining were others in the textile group which eased. Tekau Knitwear and Wellington Wool made good gains. Shares in other manufacturing and distributing concerns showed two or three losses for every gain. Shares in cement, timber and other firms connected with the building trade were surprisingly strong in view of the downturn in building activity this year.

The impressive annual accounts for Fletcher Holdings, and the confident statements from Wilsons Cement and Vibraipac Blocks, have helped market sentiment Note Issue The first company to take advantage of the 1962 Budget’s restoration of the convertible note method of finance was United Empire Box. Directors early last week announced they had decided not ito go ahead with the proposed one-for-six Issue of [ordinary 5s units at 2s preImium. Instead, they are recomImending a 6% per cent convertible note issue of one for every four ordinary stock units held on August 21. This could, perhaps, start a trend in this direction. The change announced in the Budget provides for interest on convertible notes to be deducted from earnings before profit is struck for tax. The U.E. Box notes will be converted to 5s ordinary stock units at par on April 1, 1967, ranking for dividend for the full year to March 31, 1967. The New Zealand premium on Australian shares was again below 9 per cent., but, at 8.5 per cent, was higher than the previous week’s 8.4 per cent. Reid Murray (12 per cent.) showed the highest premium of any of the Australian shares traded in New Zealand on Thursday. Melbourne Industrial shares continued to regain ground on the Melbourne Stock Exchange last week. There were more buyers in the market but sellers retreated and turn-over

declined, the stock exchange reported, according to a Melbourne cable.

Rises easily outnumbered falls. Towards the close of business the upward move Lost some of its earlier momentum and trading became quieter. Investors are now awaiting preliminary reports indicating results for the year to June 30. Custom Credit held a 15 per cent, dividend after a 6J per cent, fall in profit. Prestige, Ltd., reported steady earnings, Peters announced turn-over of £3om for the year, while Colonial Sugar indicated that part of the year’s 20 per cent, profit gain came from Fiji sugar operations which ran at a loss the year before. The Sydney Stock Exchange reported a spirited rally in its mid-week roundup of the market, but by the end of the week market leaders were tending to ease. The rest of the market managed to maintain recent rises in reduced . turn-over and rises kept ahead of falls. By the close of the week’s trading the market showed less interest in oils and A.O.G. lost some of the ground it had gained earlier.

Short - term Government stock was firmer last week, and medium long-term was easier. Average short-term yield fell Is to £4 13s 9d, and average medium-term rose 2d to £5 4s 4d and average long-term Id to £5 4s lOd.

Yields to maturity on Government stock traded in Christchurcth last week were: 3 per cent. 1960-63, £4 2s 2d per cent.; 42 per cent. July 15, 1963. £4 13s 5d per cent.; 4J per eent. August 15. 1962-63, £4 9s Id per cent, and £4 9s 4d per cent.; 3J per cent. 1965, £4 15s 9d per cent.; 4g per cent. 1965-66. £4 19s 8d per cent, and 41 per cent. 1967-69, £5 5s 6d per cent. Details of transactions on the Christchurch Stock Exchange last week were as follows: Government stock, £5615 (against £6lOO the week before); local body and company debentures, 19,800 (3400); preference, 2937 (6080); banks, 245 (1210); breweries, 10.912 (13.000); building societies, 200 (1275); frozen meat, 2091 (2050); gas, 325 (nil); insurance, 2166 (5960); loan and agency, 2700 (1750); shipping, 348 (nil); timber, 750 (nil); woollens and textiles, 11,250 (6200); Australian miscellaneous, 15,150 (12,421); New Zealand miscellaneous, 25,827 (23,375); mining, 100 (300); unlisted, 835 (300); total, 75,636 (73.921).