LONDON AND NEW YORK

Evening Post, Volume CXXV, Issue 72, 26 March 1938, Page 12

LONDON AND NEW YORK

A DISTURBING WEEK

SHARE PRICES FALL

STOCK EXCHANGES UPSET

"Evening Post," March 26,

Tension in European political relations remains high, but in the earlier part of the week a ray of confidence ■was discernible on the London Stock Exchange, although it had been dealt a severe blow by another collapse in .Wall Street. Rumours of dissension in the British Cabinet did not help matters. Following a heavy aerial bombardment of Barcelona with enormous loss of life, with its implications, came the announcement that the Mexican Government had expropriated the properties of American- and Britishowned oil companies in Mexico and that the properties of foreign miningcompanies in that country were likely, to share their fate. In the middle of the week there' •was a sharp recession in share prices on the London Stock Exchange; an all-round drop in the metal market; and the price of rubber down to the lowest level since 1935, due to a falling off in consumption in the United States. Then followed yet - anotherheavy decline in values of shares on the New York Stock Exchange,; and heavy losses sustained! Australian slock and-share markets. were, weak the day' before news of- this further collapse in Wall' Street .'had been, received, "and business on the New Zealand Stock ■ Exchanges .was adversely affected. . • ■ In these untoward circumstances it jnust be difficult- for the prudent investor to compose his mind and for his stockbroker to advise him what to do and" what not to do. Business in. the Dominion was slack, and the prospects showed no. improvement .in the general situation at the end of the week. GOVERNMENT LOANS. The demand for New Zealand Government stocks and bonds was well sustained, but sellers were not quite so shy as they have been. The attitude of investors towards gilt-edged investments is usually a trustworthy indication of their regard for company Shares. With such investors, particularly if they are executives of large institutions, it would seem to be a matter of conserving the principal rather .than the earning of dividends •with the likelihood of other future advantages. The London market for Australian and New Zealand bank shares and for pastoral shares of companies operating chiefly in the Commonwealth and this Dominion was distinctly .easier this week in conformity y/tyh general conditions of the London investment market. Business in Government stocks reported last year, last week, and this week at noon yesterday is shown as iollows:— March March March 5, 18, 25, • J>.C Tear. 193 T. 1938. 1938. S 1941 — 98 *97% 3% ■ 195T 99 98%- 98% 3% ■ 1938-52 101% 103>4 108% 3% ...... 1939-52 101% *103 *103% gi^ -. 1939-43 101% 101% *100 4 -. 1946 101% 102% 102% 4 "...... 1949 102% 104% 104% £ ....'... 1955 104% 104% 104% •Buyers. Half-yearly interest on the 4 p.c. Stock (1949) is due on April 15. The sales reported this week throughout the Dominion of Government Stocks and Bonds were as follows:— 3J p.c. Stock (1939-43), £100; 3i p.c. Stock (1938-52), £103 ss; 3J p.c. Stock (1953-57), £98 7s 6d, £98 10s, £98 7s 6d, £98 10s, £98 12s 6d; 4 p.c. Stock (1946), £102 2s 6d, £102 ss, £102 7s 6d; 4 p.c. Stock (1949), £104 ss, £104 2s 6d, £104 ss, £104 7s 6d; 4 p.c. Stock (1955), .£lO4 ss, £104 10s, £104 7s 6d. 4 p.c. Rural Advance Bonds (1947 V £101 15s. The steady demand for local bodies' loans was continued, with inquiries for city loans, including 4i per cent. Wellington City (1956) at £106, and 4J per cent. Auckland City (1944) at £102. Business reported included the following:— 4i per cent. North CanterburyJHospital Board (1943), £103 2s 6d; 4J per cent. Franklin Power Board (1963), £106 10s. Company debentures inquired for included 4i per cent. New Zealand EcJrigerating (1945) at £101 10s; 6 per cent. Auckland Gas (1942) at £105, and €i per cent. Gisborne Sheepfarmers (1941) at £100 10s. Sales of 44 per cent. New Zealand Farmers' Co-op. .(1950) at £97 were reported. BANKS, INSURANCE, FINANCE. Australian bank shares continue on a weak market. This may be due less to the return on thershares at current prices than to apprehension of the course (if any) that the Commonwealth Government may take in pursuance of its banking policy as the outcome of the report of the Banking Commission. As was shown in this column last week, the shares of Australian banks usually quoted on the New Zealand Exchange have had a substantial fall in prices over the past twelve months, and that not on account of lessened profits or lower dividends, because these are generally higher than they were a year ago. The State elections in South Australia, New South Wales (today), and Queensland have some influence on the market for Australian bank shares. Bank of New Zealand shares .showed appreciation this week, rising from business at 43s to 43s 6d, but showing a recession by Id to 2d on that'price as the week closed. The annual balance of the Bank of New Zealand is taken as at March 31. The long-term mortgage shares with a fixed interest of 7J per cent, per annum were also dealt in at from 29s 6d to 29s 7d. The shares of the National Bank of New Zealand were at about the same level as last week, with business reported at around 545. Union Bank shares were a little firm, with sales at £8 15s, rising to £8 17s. Bank of Australasias were steady with business at £9 18s to £9 18s 6d. Commercial of Australia, ordinary, lost ground and sold at from 16s down to 15s lOd, and there were sellers in Wellington yesterday at 16s. The preference shares of this bank sold at £9 9s and ■£9 9s 3d. Bank of New South Wales were wanted at £31 10s, but there" were no sellers at that figure, but £32 10s was quoted as a basis for business. Commercial Banking Company of Sydney shares were to be bought for £21, but buyers were not interested in them at that figure. National of Australasia (£5) shares were wanted at £6 17s 6d, but sellers did not go below £7. English, Scottish, and Australian Banks dropped in price at sales from £5 4s 6d to £5 2s 6d.

Shares of insurance companies domiciled in New Zealand were firmer than they were last wek. Nationals showing a slight advance. South British were also dearer, sales reaching 465. a rise of 6d on the week. New Zealand Insurance were held at 60s. Standards were in demand at 58s 6d, sellers

quoting 60s-3d. Queenslands were available at 565. ■

Stock and station shares were on a quiet market, and Goldsbrough Morts showed a drop on • the week of Is, i with business done at 30s. Dalgetys sold at £8 10s 6d, as last week. Newton King, pref., realised 9s 3d. Buyers of New Zealand Loan and Mercantile lord) bid £32 10s, but sellers did not quote below £34 15s. There were buyers of the preference stock in this company at £94, but no sellers. , Business done in financial companies shares was small, but Equitable Buildings made up to 12s 6d and there were sales of N.Z. Guarantee Corporation at up to 4s 6d and Wellington Investment Co. at 9s. BASE METAL SHARES. Australian metal shares, including Broken Hill Proprietary, closed on a weaker market. Highest and lowest prices of such shares on New Zealand exchanges this week reflect in some degree the daily ups and downs of the London metal markets: — Highest. Lowest. £ s. d. £ s. d. Broken Hill 3 09 2 19 6 Broken Hill South 1 12 4 1 11 0 Electro. Zinc (ord.) 2 4 9 2 3 3 Mt. Lyell .:.:.... 1 10 0 - 1 9 0 North Broken Hill 2 12 0 2 10 2 . .The lowest prices are those at which business was reported at the end.of this week. Mount Morgan's: principal interest- is in gold. The ordinary shares of this company were dealt in at from 9s 6d to 9s Bd, the latter being the closing price. BREWERIES. '' Brewery shares were on a slow markets but there were inquiries for Dunedins at 30s,.with no sellers. Carltohs were wanted at 64s and Tooths 'at 54s to 54s 6d. New Zealand Brewerieswere easier on 'the week, opening at--45s pd .and .touching 455. 3d, but later showing improvement at business done at 45s 9d. Tooheys sold at 31s 4d. Dominion Breweries were down, dropping from 38s 3d last. week, to 375.-.6 d... . Melbourne Breweries were quoted at 565, but there were, no buyers. Sales of Queensland Brewery rights were notified at 3s. There were no buyers of Tuis at 525. RETAIL AND OTHER SHARES. Speculative interest in chain-store shares appears to have subsided. G. J. Coles were sold at down to 79s 9d, but recovered to 81s and closed at 80s 3d. Woolwbrths (N.Z.) opened'with business at 21s 6d.'and closed at noon at 21s lid.. Woolworths, Ltd., ex bonus, changed hands at 225. ■ ; But little interest was shown in New Zealand textile, manufacturing companies' shares, buyers "being exceedingly shy, except for Wellington Woollen preference which had inquiry at £5 10s 6d. Others were all sellers, including Manawatu at 345, , Kaiapoi (17s paid) at 12s, and Wellington (ordinary) at £5 Bs. Sales were Bond's Hosiery at 19s 9d and M.K. Manufactures at 11s 3d. Coal shares wanted included Pukemiro at 18s to 18s 3d, with n_o sellers. There were sales of Westports at 23s 3d, and Westport-Stocktons at 2s 6d. Gas shares were brighter this week, with sales of Christchurch at.2Bs 6d and Auckland at 20s 3d. Napier contributing changed hands at 965. Timber shares were neglected except for sales of Kauris at 21s 6d. No interest was shown in freezing companies' shares. Except for a bid of 8s for Wellington Meat Export, there were no buyers in this section. Shipping shares inquired for included P. and O. deferred at 24s 6d, and there were sales of Union Steam (pref.) at 27s and of Huddart-Parkers (pref.) at 29s 3d and (ord.) at 465. MISCELLANEOUS. Business in the miscellaneous section of the list was smaller than usual and prices of some shares which are regular features were rather lower on the week. Among them were Colonial Sugar which at £45 17s 6d dropped 12s 6d, and Australian Glass which sold at 90s 3d, or 2s 9d under last week's highest price. British Tobacco (ord.) at 48s Id showed a fall of Bd. N.Z. Newspapers were easier at business at 37s Id. Wilson's Cement dropped 2d below 18s. Dunlop Perdriaus were also a Tittle lower. Martha Mines and Waihi Investments had a small turnover at 14s 6d to 14s 7d and 9s respectively.