‘Dangers In Share Speculation’
(N.Z. Press Association) WELLINGTON, Feb. 4. A strong note of warning about the current wave of speculation on the New Zealand share market was sounded in Wellington today. The chairman of the Wellington Stock Exchange ■ (Mi E. W. Hindle), said that few people realised that waves of speculation had taken place many times in the past, and that these had led to grave disappointment for uninitiated investors, he said. “If speculative buying continues the Government could
take action imposing a capital gains tax on people making such profits from speculative short term investment. “The Government already imposes a tax on totalisators, and it is logical to expect that a similar form of tax cpuld be imposed on stock exchanges,” he said. “It was extremely disturbing for brokers to find that people were even prepared to use borrowed money to speculate.” Mr Hindle stressed that the share market was and would always be one of the best methods of saving for the future. With the high state of liquidity in New Zealanders’ hands people were prepared to ignore such old fashioned
things as asset backing for a company, Mr Hindle said. Investment was now being made purely on the basis of how the market might perform the next day. Stockbrokers were finding that traditional investors in first class equities were now seeking ways and means of participating in speculative issues to the detriment of their long term investment plans, he said. If speculative buying continued the Government would tend to take action declaring that people making such profits were encouraging some kind of capital gains tax, Mr Hindle said. The feeling had crept into the New Zealand market that the speculative issue was a
good investment, he said. “I have recently had the sad experience of talking to long standing clients who have in the past few months departed from a proper course of planned investment, in an effort to jump on the speculative bandwaggon.” People who had been making speculative paper profit were well advised to capitalise on these gains and put their investments into stocks having intrinsic value, he said.
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Bibliographic details
Press, Volume CX, Issue 32214, 5 February 1970, Page 15
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355‘Dangers In Share Speculation’ Press, Volume CX, Issue 32214, 5 February 1970, Page 15
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