Stock Exchanges Reopen

Evening Star, Issue 22938, 21 April 1938, Page 8

Stock Exchanges Reopen

Bank of Adelaide’s Accounts Dividend from Sharland and Co: The New Zealand Stock Exchanges, with the exception of Auckland, reopened to-day. Auckland will resume business next Tuesday. A brighter trend marked local operations, although busi-' ness was restricted and gains limited. Australian mining was uncertain, but industrial leaders were better. The Bank of Adelaide has raised its dividend from '4| per cent, to 5 per cent, with a final distribution of 2i per cent. Net profit of £65,788 compares with £61,337 in the previous year. Sharland and Co. has declared an interim dividend of per cent, on all shares.

ItyDEX FIGURES INVESTMENT INFLUENCE GROWTH IN AMERICA DOMINATION OF MARKET Within the last few months investors have witnessed the spectacle of the Australian and New Zealand Stock Exchanges regularly reacting to any movements in the industrial index in New York. Reference is so frequently made nowadays in overseas reports to the governing factor of indices in investment activity that some explanation is required. According to a treatise on the subject issued by a Melbourne stockbroking firm Wall Street to-day is dominated by the Dow theory. American investors watch the average of 30 industrials with hypnotised gaze. As it moves so they determine their action. BASIS OF.THEORY, The theory was enunciated by its author, Charles Dow, in the ‘Wall Street Journal ’ at the. opening of the current century. Although no exact science, it has, since 1929, gathered status in the minds of American investors. Briefly, it is based on the movements of indices representing 30 industrial and 30 rail stocks. There are two principal movements. The first is the primary, represented by a bull or bear market. This is the major movement or trend, and may last from a year to five years. The second is the secondary, represented by a sharp reaction —downward in a bull market, upward in a bear market —lasting from a few weeks to three months. ' Industrials and rails must move to-gether—-not necessarily daily. If they vary in trend it is a sign- of coming change. If, in the progress upward, the latest peak rises above the previous peak, and the latest trough is higher than the previous trough, the market barometer is bullish. If the_ reverse, it is bearish. The lesser points in the theorv are not regarded as important. ■ The theory is criticised on the grounds, that in these days economic factors have developed which greatly modify its usefulness, and also upon the ground that to measure the market value of stocks running into thousands of millions of dollars by a yardstick of 30 stocks, itself elastic, is a travesty of ordinary investment methods. APPEARANCE IN ENGLAND. Sections of the English investing public have become infected with the theory, and one commentator recently remarked that London would have to shake itself free of this slavish following of Dow-dominated Wall Street. _ It has developed in Australia, particularly 'Melbourne, but a leading investment house there expresses the view that the practical methods of Australian investors should make it easy to laugh this incipient growth of theory worship out of the picture. Jn America, however, they state, the Dow theory has been transmuted by a wide strata of speculators and investors into a now. investment cult. The spell is not lightly broken. Until it is broken the Dow tfieerv will sway selling or buying in "Wall Street as the moon governs the tides—to the ill-content of securities markets everywhere and the unalloyed delight of the bears of all nations.

WOOL PROSPECTS 1 AUSTRALIAN OUTPUT LIGHT GROWING CLIP BETTER NEXT SEASON 7 Weather has been a bugbear to the Australian sheep industry this year, according to thelatest report of Wmchcombe, Carson Ltd., Sydney woolbrokers. Over a wide area of the Commonwealth, and particularly during the past few months in New South Wales and portions of Queensland, absence of rain has caused heavy expense to pastoralists in hand-feeding and agistment “In Great Britain mild winter weather curbed sales of woollen goods, ’ the report states. “Turnover at the United Kingdom mills was satisfactory up to September, but absence of the usually cold October and November conditions gave a check to business. This period of the year is normally an excellent time for making sales, owing to the public demand for warm apparel. “ The maintenance of Japanese buying lias been a most favourable factor at recent Australian auctions. Generally, the trend of world commodity prices has not been upward. Metal values have been on a low basis compared with some months ago, but wool has not varied in price to any marked degree during the past few months. Countries using artificial fibres to the greatest extent have increased their wool purchases owing to the reduced prices at which the raw material can be obtained. “ The condition of the late-summer shorn wools of New South Wales, which have been recently offered m Sydney, supplies a guide to the growing clip. The sheep have produced considerably less wool per head than a year before. “Except in a few districts ot the State, pastures, owing to lack of ram and the grasshopper invasion, have been more or less* scanty for months. A smaller clip is certain to be shorn in New South Wales. “ As the State produces 50 per cent, of the wool grown in Australia the position is likely to influence, appreciably the coming season s supplies available in the Commonwealth, and this should assist in the mayitqpance ot current values.”

NOTES FOR INVESTORS - Mount Lyell’s policy of meeting the fall in the copper content of its ore by increasing its output is reflected in the results of operations in the first quarter of 1938. These show that a record tonnage was treated by the company s mill in the period. • * • * In the last year or so the (policy of investors as regards the purchase ot ordinary shares has changed because ot less optimism about benefit to accrue in the near future. This time last year a group of selected Australian ordinary stocks was being bought at prices showing an average yield of £3 17s per cent. Present reduced mafiket prices of the same stocks give a yield of £4 18s per cent. ,« * » • The Commonwealth Bank’s export price index for the week ended April 7 fell to 73.2, compared with 74.8 for the preceding week and 74.6 for the month of March. * * * * On the basis of the 55 per cent, tip quota, which came into force on April 1, total world supply, including that from uncontrolled countries, will be approximately 140,000 tons a year. Production in 1937 was about 206,000 tons, compared with estimated consumption 194,000 tons for the year. • • • • Subscribed capital to new share issues in Victoria in the first three months of 1938 amounted to £270,226. The K-M Steel issue of £45,000 was the largest sum included in the total. The figures for New South Wales for the period aggregated £IBO,OOO. The comparatively large total of £474,012 for Queensland included two brewery issues —Castlemaine Perkins, £208,334; and Queensland Brewery, £249,233. PRICE CF GOLD Press Association—By Telegraph—Copyright LONDON, April 20. (Received April 21, at 11 a.ra.) Fine gold is quoted at £6 19s 6d. DOLLAR AND FRANC Press Association—By Telegraph—Copyright LONDON, April 20. (Received April 21, at 11 a.m.) The dollar is quoted at 4.98|. The franc is quoted at 1582.

COMPANY NEWS SHARLAND AND CO. INTERIM DIVIDEND DECLARED 21 PER, CENT ON ALL SHARES - i At a meeting of Sharland and Co. Ltd., Wellington, the directors re- : solved to pay an interim dividend of 2i per cent, on all shares of the com- •• pauy, payable on May 10. BANK OF AUSTRALASIA I LATEST BALANCE-SHEET " i CASH ITEMS INCREASE Particulars of profit of Bank of Australasia fbr the year ended October 11 | last, and of its distribution have al- ( ready been published. The balance , sheet is now to hand. Dividend of 8 per cent., less British income tax, amounted to £297,000, which, deducted , from the profit of £309,500, gave | £12,500 to be added to the amount , brought forward, £193,329, and providing £205,830 to be carried forward. , A comparison of balance sheet items j shows that the cash holding during the year increased by £5,156,000. _ This was brought about by retaining in cash , an increase of £1,562,000 in fixed de- | posits, and an increase of £2,048 000 in , current accounts, while £1,076,000 of , Australian and New Zealand securities were converted to cash. Advances and bills discounted increased by only £160,000. Bills receivable were , £319,000 higher, and hills payable , showed an increase of £979,000. Year ended . Oct. 12, Oct.ll, 1936, 1937. £ £ „ . 800,961 809,500 Net profits ■ s 8 Djv- P- c - 289,898 297,000 Forward’ 0 ""* V.'. " ." 193.329 205,830 Liabilities— 4,600,000 4,500.000 Capital t 2.475.000 2,475,000 Reserve fund 2 000 000 2,000,000 Currency reserve 795 2 773 Circulation 00 aio*nn oe iva’ooa Deposits at interest Ts'fiOl 240 £.r P Vasri»c. v:::: ::: MELBOURNE IHVESTMEHT TRUST PROPOSED CAPITAL RETURN The directors of the Melbourne Investment Trust Ltd. have convened extraordinary meetings of the company for the purpose of sanctioning a return to shareholders of 10s a share. . The directors’ recommendations tor the voluntary liquidation of the Melbourne Electric Supply Company Ltd. and the distribution to shareholders on a share for share basis of shares held by that company in the Melbourne Investment Trust has already been approved by shareholders. Most of the shares, the directors state, have been distributed, but ■ a substantial number still remains in the hands of the liquidators because of the failure of those entitled to complete the documents necessary to enable them to become registered as shareholders. It seems unreasonable, the directors add, that the return of capital to those who have become shareholders in the Melbourne Investment Trust Ltd. should be further delayed. As soon as the way is clear to determine the future of the company the necessary steps will be taken to ascertain) the wishes of shareholders in that respect. DOMINION PICTURES HIGHER INTERIM DIVIDEND An interim dividend of 3 per cent, on preference shares and 4Jd a share on ordinary shares has been declared for the half-year ended March 31, 1938, by Dominion Pictures Ltd. The dividend is payable on April 29. The preference dividend is unchanged, but the ordinary is equivalent to 3| per cent., compared with last year’s interim distribution at the rate of 2* per cent, per annum. WUNDERLICH LTD.. DIVIDEND RAISED TO 7 PER GENT. ' Wunderlich Ltd., a Sydney building supplies company, earned slightly higher profits in the year ended February 28, and raised its ordinary dividend rate from 6 per cent, to 7 per cent. Profit for the year was £59,359 —an increase of £1,547 on that of 1936. The preference dividend of 7 per cent, required £11,200, and the ordinary dividend of 7 per cent, (interim 3, final 4) absorbed £30,800. The profit was struck after providing £33,523 for depreciation, compared with £27,794 in the previous year. An increase of £21,446 jni stocks and £21,013 in debtors shows the extent of additional business done. NEW REGISTRATION Notice of the registration of the following company appears in the latest issue of the ‘ Mercantile Gazette ’: — Smellie (G; K.) Ltd. _ Registered as a private company April 1. Office: 229 Crawford street, Dunedin. Capital: £6OO into six hundred shares of £1 each. Subscribers: Dunedin—J. M. Ringland 599, P. O. Smellie 1. Objects: To acquire, take over the business now carried on at Dunedin by J. M. Ringland under the name of G. K. Smellie, and all or anj[ assets and liabilities, to carry on business of car body builders and painters, to deal in motor cars, vans, and motor oil and all accessories thereof. BANK DF ADELAIDE DIVIDEND RAISED TO 5 PER GENT. [Per United Press Association.] WELLINGTON, April 21. Cable advice states that the directors of the Bank of Adelaide have declared > a dividend of 5 per cent, per annum on the paid up capital for the half-

year ended the 28th ultimo, payable on May 4. NET PROFIT OF £65,788, The bank reports a profit of £65,788 for the year ended March 28, compared with £61,337 the previous year. Dividend of 5 per cent, requires £62,500, and there is carried forward £45,345, against £42,057 brought into the account. The previous year’s dividend was 4J per cent. The, accounts give in detail the composition of the reserve fund of £1,000,000. Of the amount £895,135 is held in Government securities, £9,002 in other securities, and the remainder, £95,863, is used in the general business of the bank. HENRY JONES DIVIDEND DISTRIBUTION OF 6D A SHARE [Per United Press Association.] WELLINGTON, April 21. The New Zealand Stock Exchange has received cabled advice that Henry Jones Co-operative has declared an interim dividend of 6d per share, payable June 1.