WILL RECOVER

Evening Post, Volume CIX, Issue 25, 30 January 1930, Page 12

WILL RECOVER

CONFIDENCE IN

DOMINION

SHAREBROKER'S VIEW

While agreeing that the outlook was not bright, the chairman of the Christchurch Stock Exchange (Mr. F. E. Graham), speaking at the annual meeting yesterday, expressed confidence in New Zealand's ability to recover.

"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 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 falling, and as we are so dependent on our mary 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 cause 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, m 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 forced to sell, is only losing.capital on paper which will return when the conditions alter, and 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 5% per cent, to 5% per cent, has had the effect of not only stopping money going out of the Dominion, but is attracting money to it. Raising money by internal loans is good up to a point, although it can be overdone, but I am sure that our Government has 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 asked 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.