MONEY FROM AUSTRALIA

Evening Post, Volume CXV, Issue 38, 15 February 1933, Page 11

MONEY FROM AUSTRALIA

"Dealing in Australian exchange (states the "Otago Daily Times") is being confined by the banks, to legitimate trade requirements^' according to advice received from the Associated Banks by the Stock Exchange Association of New Zealand. Recently the banks declined to negotiate stockbrokers' drafts, thus checking the transfer .of funds to New Zealand from. Australia. , "An unusual position arose when the New Zealand exchange! rate moved to parity With Australia. A great deal of New Zealand money was invested in Australian securities and- loss on exchange had prevented earlier: realisation. There was immediately a strong demand for: the transfer- of funds to New Zealand. ; Holders of Australian stocks-in many cases were anxious quit, as the opportunity presented itself of realising -at- a. profit. Consequently, there was a large, amount of selling in New Zealand to Australia. Stockbrokers in' Now Zealand negotiated a large amount of business of this description; PROTEST AND REPLY. "The banks have been faced with many applications for the transfer of funds to New Zealand, iand difficulties were placed in the way Of brokers' business, with Australia. A protest was made by the Stock Exchange Association, which pointed' out that the phase was only a passing one and that generally New Zealand, was a larger buyer than a seller of Australian securities. -However,-the. reply from the Associated Banks "states that, difficulty is being experienced in returning' funds to New : Zealand, and that,"while trade requirements are met, proflttaking and capital transactions canhot be accommodated. •: . . ... "The restrictions have served to"confine dealing: on the New Zealand Stock Exchanges to a comparatively small domestic market. Australian issues, which at'first rose; sharply to the levels i ' established on • the Commonwealth Exchanges,' have eased slightly and the market values are about 5 per cent, below Australia." : ; It may be added that in; Australia there have been heavy demands for New Zealand exchange^ arid as such funds are fair from plentiful, the banks over there are, being cbinpelled' to curtail sales on New Zealand,