COMMERCIAL Mr Lake Chose Only Way Out Of Problem

Press, Volume CVI, Issue 31168, 19 September 1966, Page 21

COMMERCIAL Mr Lake Chose Only Way Out Of Problem

(By Our Commercial Staff)

By allowing a partial resumption of trading in overseas shares on New Zealand stock exchanges the Minister of Finance (Mr Lake) seems to have chosen the only way out of a problem posed by the last Budget.

But Mr Lake’s mid-week announcement last week on how the scheme will work was not greeted with any wild enthusiasm by sharebrokers. They would like a return to the halcyon pre-Budget days. Perhaps the only one to get any satisfaction from the news of the easing of the restrictions on trading is our old friend the genuine investor.

The latest move means that he will get some measure of freedom to buy and sell overseas shares. However, this trading will be limited to buying or selling sterling area securities held in New Zealand before June 17< This seems to be a weakness of the scheme, as the Christchurch Stock Exchange chairman, Mr T. J. Chamberlain, was quick to point out-

“There will be a gradual run down in the overseas stocks which can be dealt with between New Zealand residents,” he commented after Mr Lake’s announcement.

Undoubtedly the holder of any overseas securities will be a cautious seller so it seems unlikely that the latest measures will speed the tempo of trading very much. Full details of the scheme

have yet to be worked out between the Stock Exchange Association and the Reserve Bank. Mr Lake was forced to take drastic action in his Budget to halt the drain on overseas funds. Since then he has been under pressure to restore trading in overseas securities.

He has done the best he can in the circumstances to help the genuine investor, while keeping a control on transactions. His scheme seems to be the only logical course that he could have taken. It still means that investors are restricted to a degree, but Mr Lake’s concession should be recognised as a compromise between what was desired and what could be done.