GRATIFYING RESPONSE

Evening Star, Issue 22070, 2 July 1935, Page 9

GRATIFYING RESPONSE

HEW ZEALAND LOAN CONVERSION LISTS OPEN ONLY HALF AN HOUR Press Association —By Telegraph—Copyright LONDON, July 1. The New Zealand loan was over-sub-scribed, the cash lists being open for only half an hour. REASONS FOR SUCCESS NEW ZEALAND A FAVOURITE WITH INVESTORS. LONDON, July .1. (Redeived July 2, at 11 a.m.) The quick success of the New Zealand loan was generally anticipated, for the dominion is a favourite with investors, and is thus able to place loans in more favourable terms than Australia. Among the several reasons advanced for this is, firstly, that New Zealand, by comparison with Australia, is a very modest borrower, having made only one appearance yearly for several years past, and only for about £5,000,000 each time, whereas Australia’s operations on this market in recent years have exceeded £115,000,000, largely, of course, conversions, but still involving a considerable amount of new money. Another important cause of New Zealand’s popularity is that there has been no great political disturbance and no threat of default, which had such a disastrous effect on Australia’s credit here before the National Government came into power. Then there is the fact that Australia’s total public debt is over £1,222,550,000, compared with New Zealand’s £302,700,000, which certainly has an effect on investors, who fail to realise that Australia’s debt per head of population is actually smaller than that of New Zealand,

It is unlikely that Australia will immediately enter the loan market. The New Zealand success, strengthening the firmer trend in gilt-edged securities, means that Australia will await even a better market than at present exists, f ____________