NEW SOUTH WALES LOAN

Dominion, Volume 19, Issue 155, 27 March 1926, Page 9

NEW SOUTH WALES LOAN

DISAPPOINTING RESULT VARIETY OF EXPLANATIONS OFFERED (Rec. March 26, 8.10 p.ni.) London, March 25. Seventy per cent, of the New South, Wales loan was left with the underwriters. All the newspapers give prominence to the disappointing result, financial writers offering a variety of explanations. The “Morning Post’s” commercial editor comments: “For the third successive time New South Wales has failed to attract an adequate response from investors. Probably, as previously, the, market will eventually absorb the stocks, but the result will certainly not be conducive to the popularity of New South Wales issues. I do not think that the explanation lies merely in the precise terms of the issues. As a matter of fact there is increasing concern here regarding the rapidity of the growth of the New South Wales per capita debt. Moreover, unlike New Zealand, New South Wales’ prospectuses give extraordinarily meagre information regarding the State’s ■finances.” The “Daily Express” says: “Investors are getting a little shy of lending to Australia. If borrowers had not the shelter of the Trustee Act they would find it still more difficult to satisfy their requirements.. There are many industrial debentures infinitely better secured.” The “Daily Chronicle” says: “The eagerness of investors for more generous terms must be largely attributed to the immense scale of national expenditure, which gives no prospect of taxation relief, and thus keeps the net yield of nigh-class stocks at a relatively low figure.” The "Financial News” says: “The underwriters escaped lighter than some expected. The discount will doubtless disappear unless further colonial issues are more attractive.” The “Financial Times” says: “The request for more liberal information than the Commonwealth and States’ prospectuses afford is reasonable and fair. New Zealand publishes particulars and the Crown colonies are equally frank, but New South Wales and several others do not attempt to give any information. Possibly they think it infra, dig., but no business man would dream of asking for money without detailed information regarding the secur-ity.”—Aus.-N.Z. Cable Assn.