FINANCIAL PULSE

Evening Post, Volume CIX, Issue 25, 30 January 1930, Page 11

FINANCIAL PULSE

DROP IN SHARE VALUES

FURTHER FALL PROBABLE

(Special to "The Evening Post") CHRISTCHURCH, This Day.

The annual meeting of the Christchurch Stock Exchange, Ltd., was held yesterday, Mr. F. E. Graham (chairman) presiding over a large attendance of members. In the course of his address .the chairman said: "The markets were very brisk during the major portion of the year, and prices were well maintained, although perhaps on the high side with a low interest return on the bank and other gilt-edged stocks. In October a peculiar combination of circumstances, of which the main items were the fall in wool prices, industrial unrest in Australia, the rise in the bank rate in London, and financial crashes in England and America, caused a serious fall in share.values; and unfortunately this fall has continued ever since, and is still very much in evidence to-day. "The wool market is also still failing, and as we are so dependent on our primary products in Australia and New Zealand, I do not think we have quite seen the end of the fall in share values yet. However, whilst there is not much catfse at the moment for optimism, on the other hand I do not see any reason for undue pessimism, as I have great 'confidence in the recuperative powers of Australia and New Zealand; and although it may take some little while"to come about, that these two countries will recover I have not the slightest doubt.

"We have had periods of financial depression before and recovered from them, and if we could see industrial peace in Australia and satisfactory loan arrangements there, increased production and economy of imports if carried out would soon have their effect.

"In the meantime the investor who is not foTced to sell is only losing capital on paper which will return when, the conditions alter. There are and will be many opportunities for the investor who is fortunate enough to have capital at his command to buy very sound stocks at a most remunerative return for his investment. During the period when interest returns were low, some investors were seeking better returns outside New Zealand, but the action taken by our Prime Minister in raising the interest rate for a New Zealand loan from 5i per cent to 5i per cent, has had the effect of not only stopping money going out of the Dominion, but of attracting money to it. Eaising money by internal loan is good up to a point, although it can be overdone, but I am sure that our Government hai done good in this instance, although perhaps local bodies might not subscribe to this view.

"It is a very difficult position that the sharebroker finds himself in to-day when aske'l to give his advice. I think the attitude that sharebrokers should adopt at the present time is to point out to investors the position as they see it, and to leave the final decision to their clients.

"It has been recognised for a long while past that the New Zealand Companies Act is greatly in need of revision, and the Chambers of Commerce, the Accountants' Society, and our own association are urging the Government to take immediate steps to bring the Act up to date, as has recently been done in England. From our own point of view one most important provision of the English Act is the restriction placed on the share hawker, and if we can have legislation passed in New Zealand on the lines of the English Act, it will be greatly to the benefit of the public not accustomed to dealing in stock exchange securities. The question was brought up in the House last session by members of the Labour Party, and I hope that in the next session legislation will be passed to give effect to our views."

The following officers were elected for the ensuing year:—Chairman, Mr. F. E. Graham (for the twentieth consecutive year); vico-chairman, Mr. H. Kitson; eommitteey Messrs. O. W. B. Anderson, Warren Fisher, C. H. Lawrence, and A. F. Scott.