COMMERCIAL Little Hope That Curbs May Be Lifted—Yet

Press, Volume CVI, Issue 31162, 12 September 1966, Page 17

COMMERCIAL Little Hope That Curbs May Be Lifted—Yet

(By Our Commercial Staff) Hopes that some way may be found for trading in overseas stocks in New Zealand stock exchanges seem to be fading as the weeks roll steadily by.

Talks between the Government and the New Zealand Stock Exchange Association have been going on since June, when the Budget halted trading in overseas securities in New Zealand currency.

So far no agreement has been reached, and in Auckland last week it was suggested that there may be no solution for another six months.

Members of the Auckland Stock Exchange met on Thursday to discuss the situation and it is likely that similar meetings have been held on the other exchanges to keep brokers in the picture. It is believed that the Stock Exchange Association has put up to the Government what could be a workable scheme for resumption of trading in overseas shares.

Any scheme would need to have built-in safeguards protecting the New Zealand pound and be absolutely foolproof against being circumvented. But if a scheme has been proposed it would seem that the Government does not have the same kind of faith in it that brokers have. Restrictions Hardest hit by the restrictions has been the investor with a trans-Tasman portfolio who now finds th Australian half in cold storage. Many such investors may not have been operating on the grand scale, but these are the people who kept the market alive with their modest transactions.

To many of them the investment fields always seemed much greener on the other side of the Tasman.

Today they are dubbed as “genuine investors.” Perhaps some of them would have liked to take up some of the 30m dollar issue of medium-long term debenture stocks to be offered by Broken Hill Proprietary later this month.

Others might have been interested in the G. J. Coles plans for a one-for-five issue of 50 cent shares at 25 cents premium that may soon be coming up.

Most of them will have to pass up the chances; their portfolios would not be able to take the strain of sophisti-

cated moves in Australian currency. Maybe they could start a clamour for permission to allow them to take part in such issues through orthodox channels, but the Government is likely to remain unmoved—at least for the time being. Balance SLicets Balance-sheets once the highlight of a company’s year—nowadays have all the impact of a hammer hitting a bubble. Shareholders and investors used to look forward to the annual accounts; either in the mail or analysed in the financial columns. Preliminary reports now announce the profit rises or setbacks of a company so that by the time the balance-sheet arrives it is pretty much old hat. Lane, Walker’s full accounts came out last week —confirming profit at round £356,000 —more than a month after a crisply-worded preliminary statement had said just that. This organisation seems to have a formula for steady progress and even if this follows a regular pattern it should cause cheering rather than anything else. Whitcombe and Tombs reported, also in a preliminary statement, a partial profit recovery and a slightly higher dividend. The unaudited result of £139,176 for 10 months—the company changed its balance for the latest year—was 8.5 per cent higher than that of the 12 months before. If the latest result were extended on a 12-monthly basis profit would have ad-, vanced by more than 30 per cent.

Dividend up from last year’s 7 1-3 per cent to 7i per cent was also an advance.

Although dividend last year compared with 11 per cent in 1964, the return was the same because capital had been

lifted by a one-for-two bonus issue. New Zealand Farmers’ Co-op reported a slight dip in profit for the second year running, but dividend has been held at 9 per cent. Such minor setbacks are not unexpected: the organisation is undertaking major expansion and is pretty well holding its own. Consolidation of this expansion will reap benefits for shareholders in the years to come.

Last week’s market was again easy with 35 rises, 54 falls and 69 unchanged. Key stocks were mainly steady. But this was an improvement on the week before when falls outnumbered rises three-to-one with key stocks following the same trend. Upward moves the week before were narrow, but last week there were some worthwhile gains.