INVESTMENT MARKET

Evening Post, Volume CXXV, Issue 36, 12 February 1938, Page 12

INVESTMENT MARKET

BRIGHTER PORTENTS

WOOL & WALL STREET

N.Z. SHARES NEGLECTED

"Evening Post," February 12.

Although there was no pronounced .idication of activities on the investment market assuming the zest that has been conspicuous by its absence during the past few months, there was more than one development during the past week which may be the prelude to brighter days. The wool market in Sydney assumed a more promising aspect,-with a firm tendency and more diversified competition, the London market for New Zealand butter recovered to a point at which offerings of finest salted were realising the equivalent of the New Zealand guaranteed price, and overseas Stock Exchanges^ were the subject of more cheerful reports than " have been received for some time.

News of a recovery upon Wall Street, a development that has been awaited with some anxiety, had a heartening effect, although something .more definite is awaited before Dominion investors will consider that they have been given a sufficiently convincing lead to induce them to open out more freely.

In view of the efforts which America has made to secure "splendid isolation in the economic as well as the political world (in respect to the first of which the Secretary of State, Mr. Cordell Hull, is busily engaged in endeavouring to level the ■ trade barriers that have been raised) it may be regarded as remarkable that Wall Street should exert such an influence over the rest of the investment world, but the crash on that unstable thoroughfare which was the precursor of the big slump is not likely to be soon forgotten by those who suffered from its effects. ' Other overseas Exchanges whicn are closely watched in New Zealand are those at Sydney and Melbourne, . and much of the apathy which has existed on local Exchanges this year may be attributed to the slowness with whicn dealings across :the Tasman have overcome the holiday inertia. Without looking for other causes Sydney investors have been distracted by the sesquicentennial celebrations, and the Melbourne Exchange has been taking a while to adjust itself to the recentlylevied tax upon transactions. MONEY FOR AUSTRALIA. > , An- aspect, of. dealings upon the Aus- . tralian Exchanges which deserves consideration in this Dominion is the large *- proportion of the transactions reported .by the daily Press■ Association tele- - grams in which the parcels of,-shares '. purchased were for. "New Zealand delivery." It is apparent that many New '. Zealanders with money to invest prefer to avail-themselves of opportunities to buy shares in. Australian concerns ' (which figure prominently on the local ; Exchanges) rather than give a demon- ■• stration of confidence m industual 'undertakings nearer home. -•" The' effect of this—and brewery shares are an example—is that many -avenues of investment- in ■ New Zealand which bear a highly attractive appearance are being neglected far more ■■- than they deserve. To just what extent • the political situation, with . the pre--election session only a few months ...away, is responsible may be a matter ■of opinion. ■ '-'■■ "■ ~ '■■-■■ February ,of course, is ''income tax :.'month, a time when the public not I only counts its blessings but also has its attention drawn to what those "blessings cost. This year many are ""finding that the load is not light and funds available for investment are correspondingly reduced. •• While other kinds of investments ' either lie in the doldrums or drift backwards, New .Zealand Government stocks continue to hold pride of place, -and further advances were made m this division during the week. Almost the whole of the quotations revealed on the Wellington Exchange came from the buyers' side, bids being made daily for almost all the Government issues on the market, whereas the full week "passed without any indication being 'given by holders of some of the stocks •as to what prices they were prepared to accept. BIDS RAISED. .. Among the 3£ per cent, issues bids for the 1939-43 maturities were raised by 7s 6d, the 1941-43 stocks advanced ■ ;by 2s 6d, and others by as much as ss. Holders of the 4 per cents, refused to disclose their prices, except for a value .of £ 104 set upon the 1949 maturity, failing to respond to a raising of the bids by as much as ss. Among the ''sales reported throughout the Dominion ■were the following:—3£ per cent. (1938----52), £103; 4 per cent. (1946), £104 ss; ditto (1949 and 1955), £104. The stats of the gilt-edged market certainly suggests that where possible investors are ■ going to put their money into investments which have the backing of the ■ whole country. Of a similar class are the local body ■ debentures, several parcels of which changed hands throughout the Dominion' at good prices. The 6i per cent. Auckland Trotting Club debentures (maturing in 3944) realised £102 10s; Amalgamated Bricks sold at £92; and 3J per cent. N.Z. Farmers' Co-opera-tives at £92. BANK SHARES NEGLECTED. Bank shares are not popular at the moment although the reasons do not appear upon the surface, and, from the reports that have been made upon the results of the past year's tsadmg, it would seem that they should be sought much more eagerly than they are. The state of the market is indicated chiefly by the holders of banking shares who, in spite of the reductions they have made in their psices, have found it difficult to attract responses. Sellers' prices for Australasias were lowered from £10 15s 6d to £10 10s 3d on the local Exchange without any oids being reported; New South Wales dropped 5s and Unions 3s. New Zea,ands, which have had an easing lendsney lately, showed little change, though they were barely steady, but Commercials had a tendency to improve. Little indication was given of the trend of National of New Zealands, which have lately been among the strongest of the bank shares. The improvement in the wool market ■n Sydney had a beneficial effect upon Sold'sbrough Morts, and shares in New Zealand and River Plates were also srm. The weakening of the frozen •neat market in London which was reaorted towards the end of this week will probably be closely watched by those who are interested in the pastoral section. Quotations 'appeared in ■espect to a number of financial issues but movements either way were few and slight. Insurance shares scarcely held late levels, sellers' prices for New Zealands , jeing lowered by Is, while South British dropped by 3d and Queensland oy 6d. i MEAT AND OTHERS. ' The most firmly held in the refrig- '. crating section were Southlands, but

other issues made few, if any, concessions. Transport shares were quoted at recent levels and shares in textile manufactures were inclined to be firmer. There was little doing in the coal section, where a reviving influence was the announcement that Westport-btock-ton had found it possible to resume payment of a preference dividend after sixteen years. Holders of timber shares were willing to part with them if suitable offers were forthcoming, but there was very little inquiry for this class of shares. Brewery shares continue to be a puzzling factor. The weather and a number of other considerations seem to suggest that the breweries should be hi a flourishing condition and their shares correspondingly attractive, but the issues quoted this week had a definite downward tendency and little interest was displayed on the buyers' side. Department stores constitute another section which has fallen out of favour to a certain extent recently, though this may be explained partly by the fact that a number of issues were flattered by the prices they were bringing a few months ago. Nearly all the issues quoted on the Wellington Exchange this week were easier to barely steady. The changes which have taken place in these shares during the past year are indicated in the table on this page, although, in respect to some of the Woolworth issues, it was impossible to make comparison owing to changes in. the nominal values of the shares. Mining and industrial shares did not vary a great deal during the period under review, although the easing in the base metals prices towards the end of the week was bound to have its effect.