Auckland wants debenture trade

Press, Volume CXIV, Issue 33693, 16 November 1974, Page 21

Auckland wants debenture trade

(New Zealand Press Association) AUCKLAND. The Auckland stock exchange was trying to establish a livelier market in company debentures, the chairman (Mr H. M. McElroy) said at the exchange’s annual meeting.

He said that facilities for reporting sales would be improved. It was hoped that all members would accept this market as a serious attempt to expand activities by reporting all sales, including those by one client to another within the same broking firm, on a yield and price basis. Mr McElroy said that the Stock Exchange Association was formulating rules for participation in the bills market. He warned that bills were not a market for the amateur and that bills, essentially a trading instru-

ment, should not be used to finance substantial assets. There was as yet no real evidence of a decline in investors’ incomes, he said, but there had been a swing away from equities to fixed interest securities. The increase in interest rates had had the effect of investors requiring higher yields from equities, with a rise in the average of 4 per cent to 5 per cent to between 7 per cent and 8 per cent over the last three or four years. Possibly, the market could settle in the latter range. Mr McElroy warned that it was hard to escape the thought that a deliberate attack was being made on the country’s way of life, whfoh depended so much on a system of free enterprise and bringing out the best in each individual. He mentioned the threat of the maximum retail price scheme, the Government superannuation scheme, with the frightening money power it could soon attain, the inescapable company failures which would follow the passing of the commerce bill, and the import-export bill as a follow-up, to mop up anything which might have been left with private enterprise. All these pointed one way —the desire to control private enterprise and initiative. “The probability of unemployment and the likely loss of a great part of our secondary export market is a high price to pay for the co-operation of the trade union movement,” he added. Mr McElroy and all members of the committee were re-elected.