SHARE MARKET YEAR

Dominion, Volume 20, Issue 72, 18 December 1926, Page 10

SHARE MARKET YEAR

A GENERAL REVIEW GOOD SECURITIES SCARCE OVER-IMPORTATION OF MOTOR-CARS Dominion Special. Dunedin, December 17. A review of the money and share market for the year was given by Mr. It. Reeves, chairman of the Dunedin Stock Exchange, nt the annual meeting of the Exchange. “.Money has been fairly plentiful during the year,” Mr. Reeves said, “and recently the tendency h;is been for interest rates to drop. I refer to interest on public bodies’ debentures, and not mortgage rates, which still stand round 6 per cent. The l financial barometer for the debenture market is the price ruling from time to time for the Government Soldiers’ Settlements 51 per cent. loan. Twelve months ago this loan sold on the market at £99 7s. Cd., and to-day sales have been made at £l.Ol 2s. 6d., showing an appreciation of £1 10s. per cent.' on last year's market value. A factor in keeping debentures interest in the Dominion at a reasonable rate has been the large amount of money invested in New Zealand public bodies’ loans during the year by Australian investors. In addition to this, the Government raised sonic £5,000,000 on the London market at a favourable rate. A large amount of money has gone from Dunedin in the purchase of debentures issued by public bodies in the north. “The difficulty of finding sound local investments for dur clients has not lessened during the year; indeed, the scarcitv of good securities continues to drive its, no matter how unwillingly, into outside markets, and more particularly into making purchases of Australian stocks. The result is that an increasingly large amount of money continues to be invested in Australian banks, insurance and commercial shares. »

“The only ‘fly in the ointment’ in regard to the future, so far as one. can discern, is not so much the. reduced prices the Dominion is receiving for its primary products., as the large amount of money being spent out of the country for the importation of motor-cars.’ No doubt this is the cause to a very great extent of the trade depression throughout the Dominion todav. Whilst I do not wish to be regarded as a pessimist, I foresee stringent financial times ahead unless the importation of motor-cars is very considerable reduced. We cannot expect improved prices for our products, but we should expect a curtailment of the huge sum sent out of the country annually in the purchase of motor-cars, tires, and petrol. During the last three vears the sum of £22,580,000 has been sent out of New Zealand, and mostly to America, thus severely affecting our trade balance. There can be only financial trouble ahead if it is continued. Taken all round, there has been a good turnover of stock and investments and mining shares, and I think we can congratulate ourselves on having had a fairly good year’s business.”