Review Of Week’s Stock Exchange Transactions

Press, Volume CII, Issue 30147, 3 June 1963, Page 9

Review Of Week’s Stock Exchange Transactions

IBu Our Commercial Editor)

Statistically, the New Zealand sharemarket was only slightly less firm last week than in the previous week. Rises outnumbered falls by two to one, a shade less than the margin a week earlier.

Turn-overs fell away after the record trading of the previous week. Some of the decline was no doubt due to the approach of the long week-end, with its counter-attractions for brokers and their clients.

Among the New Zealand shares traded, both leaders and secondary issues made twice as many gains as losses. The tone of the market, however, was less confident than in earlier sessions.

No fewer than 14 New Zealand issues advanced Is or more, while only five issues fell sharply. Many of these large movements can be escribed to special factors. NZ. Farmers' Co-operative ordinary shares—the only shares in this company traded since the announcement of the proposed bonus share issue and split into homogenous 5s units —rose 2s to 19s Wright Stephenson debentures rose 2s to 34s 6d in first business since May 15 but closed at 345; in the same period the shares have made a net gain of Is. Devonport Ferry shareholders apparently approved the board’s decision to wind up, for the fully paid shares rose Is 3d and the contributing shares 2s 3d. Wilson and Horton’s accounts. distributed last week, showed A leap from 6 6 per cent to 9.8 per cent, in the earning rate on higher shareholders’ funds. The modest centennial bonus of 2 per cent, lifts the total distribution to 9 per cent., which the profit covers 1.4 .times. The market pushed the shares up Is 3d (allowing for the dividend) to 19s 9d.

Sharp Falls

Proportionately, the largest fall of the week—.indeed, for many months, was the drop from 2s to 6d in the price of McKendrick Glass shares, after the Government’s announcement that there was unlikely to be anything left from the sale of the assets to distribute among shareholders New Zealand Paper Mills fell 4s to 30s on the announcement of the passing of the final dividend, the interim dividend also having been passed.

Of more concern to most investors than these large falls were the lower prices accepted for several leaders, notably Tasman. Closing at 375. Tasman lost Is 3d on the week, but is still higher than at any time up to May 14 this year. Some profit-taking, coinciding. perhaps, with the completion of large buying orders the previous week, may account for this fall. Forest Products fell 9d in sympathy to 40s 6d, which is higher than prices paid up to May 20.

End Of Era

On Friday, Reid Murray shares were removed from the official list of the Australian Stock exchanges. At their peak, in 1960, the shares reached 17s 9d in Australia, when the market valued the Reid Murray empire ait £33 million. According to the company’s liquidator last week, the sharos must now be regarded as worthless.

Worthless, that is. except for those who wish to use a share-holding to claim the

shareholders’ discount in any of the hundreds of stores still in the group. Thousands of the shares changed hands last week at Id, many of them being bought, no doubt, solely to qualify the new holders for this discount. The discount is said to have attracted many young marrieds; it may provide some consolation to those who paid up to 17s 9d in the last three years. The disappearance of this one-time “glamour stock” from the official list may be said to mark the end of an era —the era of "get rich quick on other people’s money”—fixed interest borrowings, often at very high interest rates, to finance rapid expansion. Provided this expansion is soundly based, and turn-over and profits keep on rising, the interest bills can be met and there is still a handsome surplus for distribution to equity shareholders. But if, as in Reid Murray’s case, profits fall below the level necessary to meet interest payments, the whole topheavy structure may collapse. Turnover of ordinary shares, rights and options in Melbourne rose 14 4 per cent, in the six months ended Mar&h this year, compared with the same period of 196162, according to figures released last week by the exchange. Activity in mining shares declined by 31 ■ per cent, and preference shares rose 25 per cent. For all share securities, the increase was 1.4 per cent. — from 76 million to 77 Am.

London Week

London stock markets ended last week on a far better note than seemed likely earlier on, Reuters financial correspondent reported. Prices lost ground steadily at the beginning of the week on small selling and lack of support but the trend was reversed in mid-week as the selling dried up. Prices then moved up on a broad front and more than recovered their earlier losses in many cases to dose higher on balance.

At the beginning of the week markets were chiefly restrained by political uncertainties, and particularly speculation regarding the date of the General Election, but fears of an autumn election diminished later when sentiment was helped by the Government’s housing plans and the scheme to stimulate orders for the shipbuilding industryThe .outstanding feature of the week was the persistent and substantial buying of gilt-edged securities which

forged ahead to record gains extending to nearly a point. Long-dated stocks were chiefly favoured. Leading industrials recovered their early losses and mostly showed small gains on the week while industrials as a whole went ahead after the earlier dullness, although not all the lasses were recouped. Steels lost ground following the Lancs, Steel and Consent Iron statements. Banking. insurance and property shares attracted little attention. United States dollar stocks moved up in response to Wall street's improvement but Canadians were mixed. The. dollar premium continued its recovery, gold shares attracted a selective demand and other mining sections were well maintained. Oils were narrowly irregular. Rubbers developed a better trend but teas remained subdued. Asutralian Government loans turned in the best performance over the week, scoring gains to around a point in the wake of the advancing gilt-edged markets. A soft spot in irregular banks was Australian and New Zealand.

Mines and oils lacked interest. Dalgety, a dull exception among pastorals, have not benefited from diversification moves.

Melbourne Eases

An easier tone developed for shares on the Melbourne Stock Exchange last week. Some key stocks drifted to lower levels and turn-over declined. Sugar shares Lost ground following lower prices for sugar on the London market.

Highlight of the company news for the week was the £4.5 take-over bid by Unilever for the Rosella Preserving Company. H. C. Sleigh is making a cash offer for Rubbertex Industries and Dunlop and Olympic Tyre are combining to manufacture tyres in Western Australia.

Colonial Sugar shares were 3s cheaper when the market closed, while 1.C.1.AJT.Z., Myer, John Lysaght and AU.I. lost some ground on the week’s trading. Average yields on Government stock last week were steady to easier. Both average short-term and average long-term yields were lower, while average medium term yield was unchanged. Average medium term yield was £5 2s 6d, while average short-term yield was Is 2d lower at £4 12s lOd, and average long-term yield 2d down at £5 3s sd. Yields to maturity on Government stock traded in Christchurch last week: 4% per cent., 15/6/1965, £4 7s 4d per cent.; 3% per cent., 15/9/ 1965, £4 7s 8d per cent, and £4 8s per cent.; 4 per cent., 15/8/1965-66. £4 17s IOJd per cent.; and 4% per cent., 15/ 11/1970-72, £5 3s 2d per cent. Details of transactions on the Christchurch Stock Exchange last week are as follows;—

Government stock, £B9OO (compared with £15,170. the previous week); local body and company stock and debentures, £2OOO (£4300); preference shares, 2750 (850); banks, 1247 (255); breweries, 3680 (3790); frozen meat, 4038

(5073); insurance, 6712 (5300); loan and agency, 4190 (4650); shipping, 936 (nil); timber, nil (200): woollens and textiles, 13,622 (7565); miscellaneous (Australian), 16,492 (26,294); miscellaneous (New Zealand), 23,660 (35,137); mining, 600 (2350); unlisted, 675 (1599); total, 74,602 (93,063).