Investing in shares popular and profitable pastime

Press, 19 August 1982, Page 24

Investing in shares popular and profitable pastime

Investing in shares has become a popular and profitable pastime for thousands of small and not so small investors in this country, and their influence on the stock market has been responsible for many of its improvements. . . '

The advantages of having money invested in shares are the ease and speed with which they can be bought and sold. This tends to make for an informed and untrammelled market; the sharemarket is one of the best examples of the virtues of free enterprise. Wattie Industries, Ltd, a household name and a popular share with many investors, had two years ago 24,642 ordinary shareholders,- 15.379 preference shareholders and 4471 debenture holders.

More than 19,000 of the shareholders owned fewer than 400 ordinary shares. N.Z. Forest Products, the country’s second-largest company, had 65,675 shareholders at the same time. Some 36,000 of these held fewer than 500 shares. ■

This picture is much the same in most companies listed on the stock exchanges. However, many of these investors have only a limited knowledge of how the share market operates and the terms used on this commercial page.

Because of this, the articles appearing on these two pages today explain some of the features appearing regularly on the commercial page. They cover the quotations, which appear daily, the different types of shares, how to calculate the price of shares after the ex-issue date, and common terms used which are not readily known. 1

The commercial page deals with the affairs of business and commerce, with the people who are engaged in this, and with markets, so that interested readers and investors are kept reasonably informed of what is going on.

Much of this information is about the sharemarket: it includes daily a summary of trading on the stock exchanges’, a list of the sales made the previous day, a list of the price changes, the columns of quotations — what investors are prepared to buy at or to sell for.-

The page also reports on the Australian sharemarket, and daily gives the prices of a selection of Australian shares.

It also includes company and economic news, the movements and profitability of companies, the developments in particular industries, and economic background — in fact any news that may affect the value of investments. You will find on .the commercial

page - to the extent that space permits — news of the property market, gold, silver, and metals prices, trading on foreign exchange markets, how our meat is selling overseas, crossbred wool futures, movements in interest rates, and a host of other items which may help an investor to make intelligent investment decisions. in Christchurch, transactions in shares of listed companies are made through sharebroking firms, which are members of the Christchurch-Invercar-gill Stock Exchange Association. The stock exchange lays down minimum parcels of shares which can be bought at varying prices. These parcels, which do not cover mining companies are:— One thousand shares where the price of the shares is 25c or less. 500 for shares priced from 26c to 50c, 200 for shares between 50c and 100 c. 100 if worth between 101 c and $19.99, and 10 if the shares are worth more than $2O. Both buyer and seller must of course, pay brokerage, a commission fee to the sharebroker for his work. This is 2.5 per cent for the first $5OOO of consideration. 1.5 per cent on the next $45,000 and 1 per cent on the amount by which the consideration is more than $50,000.

Brokerage fees for the shares of unlisted companies are 50 per cent higher.