COMMERCIAL Australian Sharebrokers Favour B.H.P.

Press, Volume CVIII, Issue 31583, 22 January 1968, Page 13

COMMERCIAL Australian Sharebrokers Favour B.H.P.

Not unexpectedly, the opening week on New Zealand stock exchanges was erratic. Since the close of trading in 1967, investors have had three weeks in which to reappraise the market and the result of this was a firm trend on Monday, Tuesday and Friday but an easier market on Wednesday and Thursday.

So far there are not enough economic reasons, other than the prices of shares themselves, to justify a buoyant New Zealand market. Crossbred wool prices at the Wellington and Christchurch sales were down on last year’s, but against this the latest lamb schedule of $5.53 for 301 b lamb with 21b of wool is near boom prices. This time last year the comparable price was $4.22.

The New Zealand Institute of Economic Research in its December quarterly predictions forecast a balance of payments in the external accounts by June of next year. The deficit for the year to September, 1968, was estimated at $lO5 million.

The institute also forecast an increase in the domestic price level of about 5 per cent over a full year because of devaluation and a fall in domestic outlay in volume terms.

As well, the institute does not see 1968 as being buoyant for companies and expects no more than a slow growth in company income. However, much of this has been discounted in share prices. Many stocks are selling around par and these, and others selling at premiums, are offering attractive dividend yields. When To Buy This poses the problem of when to take advantage of this position, without taking further losses if the market should continue its easing trend set before Christmas. Events leading up to and including the Budget should give a guide as to how successful the Government considers its present measures. Meanwhile, the Australian mining boom has continued, lately because of a spate of buying from London. At the moment British residents have a “voluntary” restraint on movements of capital overseas, but it may be that this will have to be changed into a statutory restriction. Mining Favoured According to a survey by the “Australian Financial Review” of what 10 leading Australian sharebroking firms consider to be the best prospects for 1968, mining shares continue to be favoured for growth. These rose a net 60 per cent in 1967 and again Broken ‘

Hill Proprietary arises as the most favoured individual stock. One broker believes that

the market trend for 1968 will depend largely on B.H.P.’sbil and gas exploration successes and whether any further nickel discoveries are made. Several think tbat industrials will remain flat, giving as reasons the drought, cheaper imports because of devaluation, the tightening of the international money supply, and rising interest rates.

After 8.H.P., which was universally recommended, came Western Mining Corporation, which this year has already jumped about $8 to more than $37, not bad for a share with a par value of 50c. C.S.R., Hamersley, 1.C.1.A.N.Z., Kathleen Investments, Mt Isa and Peko-Wallsend, were grouped equally after W.M.C., then came a host of shares which included Aberfoyle, Alliance Oil Development, Ampol Exploration, Ansett, A.C.1., A.0.G., B.H. South, C.R.A., Electronic Industries, Mt Morgan, New 8.H., Santos and W. R. Carpenter.