COMMERCIAL Review Of Week’s Stock Exchange Transactions

Press, Volume CII, Issue 30219, 26 August 1963, Page 16

COMMERCIAL Review Of Week’s Stock Exchange Transactions

[By Our Commercial Editor] The sharemarket continued to rise last week. The upward movement was not so pronounced as in the previous week, but the undertone was very’ firm. New Zealand shares opened on a steady note, with rises and falls in balance. On Tuesday there were more rises than falls, and the margin between rises and falls widened as the week progressed until on Friday there were nearly three rises for every fall.

Overseas issues were comparatively steady. The Sydney index showed a slight movement over the week, and New Zealand price changes in Australian shares were small, and mainly upward.

Many of the previous week’s buying orders for leading New Zealand stocks were filled last week, when demand foFthese issues, though still buoyant, was slightly less ebullient.

Second-rank New Zealand issues continued to meet a good demand. Over the whole week’s trading, about five New Zealand shares made gains for every three that lost ground.

The first iuain sale of the 1963-64 wool-selling season was held at' Dunedin last week. Although prices had been firm at overseas sales, and at winter sales of crutchings and second-shear wool, it was nevertheless gratifying to see the higher prices paid for the crossbred fleece wools at Dunedin and, later in the week, at Timaru. Wool Prices The price level established at these first two sales is approximately 3d per lb above last season’s Dominion average. It does not follow, of

course, that the average for the new season will be 3d above last season's, but at least the season has opened auspiciously. With the Dominion wool clip now above 600 m pounds weight, every Id per lb on to the price means an extra £2lm—most of it in overseas currencies—on to the wool cheque. The sharemarket may be expected to respond to the higher level of wool prices, if last week's levels ' are maintained. A study of wool prices and share prices made some years ago suggests that share prices are likely to be affected by a Change in wool prices at a month’s interval.

Last week Farmers’ Auctioneering, Newton King B and North Auckland Farmers which later reported a spectacular profit recovery) made modest gains.. Dalgety and N.Z. Loan jumped Is 9d. New Zealand Farmers’ Cooperative lost 3d. These shares and other stock and station agency scrip should be in greater demand if wool prices remain firm this season. Unit Trust The half-yearly report of the directors of the First New Zealand Unit Trust to shareholders is the least informative of the six reports to date. As usual, the number of units outstanding is not stated, but a new omission is the total value of the portfolio. From the drop in net distribution, it may be calculated that the managers redeemed about 350,000 more units than they sold to new and existing unitholders. This outflow of £87,500 was balanced by sales of investments, but improved market values for the remaining investments apparently more than offset this outflow. In the last six months the buying price of the units has risen from 4s 3d to 4s Bd. Most of the shares sold in the six months were Australian, reducing the proportion of Australian investments in the portfolio from 49.7 per cent to 47.3 per cent. Premium Eases

The premium on Australian shares eased again last week from 4 per cent to 3 per cent. The later figure is the same as at the end of July. In recent months the premium has been lower than for many years, presumably because the New Zealand demand for overseas funds (or scrip) has eased. If the premium rises later to the 6 per cent-9 per cent range, which has been usual in most years, today's buyers of Australian shares will have a “built-in” hedge against a fall in the Australian price of their scrip. London Brighter Distinctly brighter conditions developed in London stock markets last week, after the recent period of unsettlement, and industrial equities advanced to such good effect that many prices are at their best levels for two years, according to a London cable. Bulk of the attention was centred on industrials. Gold shares also attracted a good deal of interest, but the rest of the market was subdued. Gilts suffered from new issue indigestion, and the failure of the £l2m Salford issue—6l per cent was left with the underwriters—did not help. Gilts, however, recorded only small losses on the week. Recent scrips fell back, and the new Salford stock opened at a small discount. Sentiment in industrials responded well to the rise in industrial production in June overseas trade figures. Stock Shortage Buying of industrials was not heavy, but it was persistent while there was hardly any selling. The resultant shortage of stock in the market contributed substantially to the rise in prices. Gains of a Is and more were general in the leading issues, while many strong features developed elsewhere in industrials. Bank and insurance shares attracted little interest, but hire purchase shares improved in response to .Lombard's interim statement. Dollar stocks fluctuated within narrow limits. Gold shares moved up on persistent small buying, but the gains were reduced towards the end of the week following profit taking and the reaction in gold shares in New York. Coppers were dull and other base metals indecisive. Oils attracted some good buying and recorded useful gains. Rubbers were on the dull side but teas held steady. Australians were quiet and irregular. Apart from one or two features. prices moved narrowly. Government stocks recorded small mixed changes.’

In banks, E.S.A. hardened on the results and rights issue news. In mines, a reaction in Mount Isa was the feature. Elsewhere. Dalgety moved up sharply but Australian Agricultural fell back. Govt. Stock Average yields to maturity on Government stock last week were mainly steady. Yields on long term rose Id to £5 2s 3d. but yield on short term was steady at £4 10s 5d and on medium term unchanged at £5 Is sd. Yields to maturity on Government stock traded in Christchurch last week: 41 per cent 15/6 1965. £4 9s per cent and £4 9s 4d per cent: 33 per cent 15/9'1965. £4 6s 6Jd per cent, 5 per cent 15/8/66-68. £4 19s 4jd per cent. Tunrnover on the Christchurch Stock Exchange last week was as follows: Government stock, £9680 (£6905 the previous week); local body and company stock, £2650 (£9700); preference. 640 ( 3800); banks, 1004 ( 703); breweries, 1900 (2400); frozen meat, 2200 (435); gas, 433 (100); insurance, 1250 (1000); loan and agency. 5522 (2847); timber, 1000 (812); wool 7550 (8025); miscellaneous (Australian), 14.634 (15.442); miscellaneous (New Zealand), 45.763 (51,321); mines, 800 <7900); unlisted. 493 (100); total, 83,189 ( 94.885 L