Commerce, Mining, Finance

Evening Star, Issue 23038, 17 August 1938, Page 8

Commerce, Mining, Finance

Two N.Z. New Issues Dominion Breweries Seeks Fresh Capital • Although gold and foreign exchanges continue to reflect the political tension, London and New York share markets are standing up remarkably well. In the former centre prices are drifting downwards in the absence of buying support, but as yet there are no indications of selling pressure. Wall Street advanced almost two points yesterday on a moderate turnover. The local investment market continued a steady and quiet course, with little marked change in values. Business showed signs of brightening. Dominion Breweries Ltd. proposes to issue 50,000 ordinary shares of £1 each at a premium of 6s in the proportion of one for five. The distribution will be made to all shareholders, irrespective of whether they hold preference or ordinary scrip. On the ground that the company is very much undercapitalised, New Zealand Farmers’ Fertiliser will place before shareholders at a special meeting next month a resolution proposing to issue 150,000 cumulative preference shares at 5| per cent, per annum. The directors intend to offer only 120,000 for immediate subscription, and to hold the remainder in reserve.

HO SELLING PRESSURE LONDON STOCK MARKETS WEATHERING POLITICAL TENSION Prau Association—By Telegraph—Copyright LONDON, August 16. i (Received August 17, at 11 a.m.) Though, the gold and foreign exchange markets continue to reflect the political tension the stock markets are standing up remarkably _ well. Prices are drifting downwards in the absence of buyers, but there are no signs of, pressure to sell. _ I The trade returns offer little comfort, as the indications are that the exports will show a further fall in the_ autumn. Some commentators consider it due to the excessive costliness of British products. The calmness of the markets in London contrasts with Berlin, where reluctance to buy resulted in acceleration of the slump.

WOOL PROSPECTS MILD OPTIMISM JUSTIFIED BETTER TONE IN MARKET CONSUMERS AND " PRICE REDUCTION COMPLEX “ August is usually a quiet month in the wool trade, but this year it has brought a better ton© in the market, and this has inspired confidence. There has not been any appreciable advance in values, but consumers who seemed to have a price-reduction complex a little while ago now think that the future may bring brighter markets. The buying at the recent London sales shows that American millmen are interested in the raw material. Advices received toward the end of June were that the United States markets were brighter and that the piece goods demand had also shown some improvement. However, as "Winchcombe, Carson Ltd., the Australian woolbrokers, say in their latest report, 'it has to- be remembered -that falling values in the last year have brought /heavy losses for those who bought wool, and consumers will therefore need to feel very sure of the future before they commit themselves to extensive purchases. For that reason wool sellers will be unwise to be unduly optimistic about prices for the coming season. Because of the drought in Australia there will probably he plenty of faulty dusty clips unusually short in staple, and well-grown wools are likely to have the factor of reduced supplies in their favour. ARTIFICIAL FIBRES. A good deal has been heard recently about artificial fibres and their influence on the market. Winchcombe, Carson say that while they do not wish to ignore artificial fibres, they do think that their importance has been exaggerated. So far, no fibre as good as wool has been produced. Substitutes have been used freely for blending, but by cheapening goods they have offered a considerable encouragement to use wool. Artificial fibres were no more responsible for the falling-off in the demand for wool in the last 12 months than growers are responsible for heavy stock losses in times of drought. Wool became cheaper because world trade declined. Producers of rayon and staple fibre earned less in common with sheepowners and manufacturers of woollen textiles. Germany and Italy, who have done a great deal, to develop the production of artificial fibres, actually used more wool in the last 12 months than they did_ in the previous year. If world business revives artificial fibres will not prevent wool from being bought at higher prices than those ruling now, FRANCE BUYING MORE FREELY. France seems to be recovering her need for wool. She bought with greater freedom in the last season, and she has been the chief purchaser of fellmongered wools since the auctions closed. She has also been a good buyer of sheepskins. The total available French supplies from imports of wool, local production, and the wool pulled from sheepskins declined about 40 per cent, from 1933 onwards. Because her currency was out of line with the currencies of other countries, her export trade and her normally profitable tourist traffic diminished alarmingly. Devaluation of the franc and of extravagant working conditions in her industry have recently enabled her business to show some improvement, and if the peace of Europe is not further disturbed her wool requirements are likely to increase.

SHARE PRICES AND TRADE IMPORTANCE OF U.S.A. TREND WILL “SPENDING AND LENDING" MEASURES SUCCEED ? “ The rise which has taken place on Wall Street has been the chief subject of comment in the financial Press recently, various writers stating their views as to the probable continuance of the advance or a quick relapse to the conditions ruling two or three weeks ago. On the balance it is logical to expect that it will be continued, with occasional quick setbacks and big fluctuations," states the monthly market letter of Securities Corporation (N.Z.) Ltd. “The,main cause of the rise is the inflationary steps taken by the American Government, for in the TJ.S.A. it has usually been the case that a rise in securities restores confidence more quickly than anything else and has a psychological effect on the whole community. As to the future, certain industries will by degrees begin to feel the effect of the Government’s 1 spending and lending ’ measures, and will "also be helped by its latest inflationary proposal—the granting of permission to the banks to lend money for a period of 10 years against approved securities, which, in effect, is allowing loans to be made against frozen credits. “ Our own markets have been naturally affected, even if only to a mild extent, by the recovery .on Wall Street, but certain anomalies may persist for some time —at least _ until people are convinced that the international political situation has improved, that there is some recovery in general trade, and that inflation is actually working. It has usually been the case-here that firm markets for industrials have held for a long time after trade has started to decline, and the reverse is also true, that depressed markets have continued for some time after there has been an improvement. JP .B. A.

METALS WEAKEN COPPER QUOTES DOWN 10/SILVER MAKES SOLE ADVANCE 'tress Association—By Telegraph—Copyright LONDON, August 16. (Received August 17, at 1 p.m.) Following are to-day’s official (middle) Quotations on the London metal market, as reported by the Australian Mines and i Metals Association, compared with those of .jAugnsh 15:— August 15. August 16.

CO-OPERATIVE DAIRY COMPANY The co-operative Dairy Company of Otago Ltd. announces the conclusion of a very successful year. A bonus .of 2Jd per lb butterfat will be paid out on August 31, being 2id general bonus, plus id shareholders’ bonus. The bonus pay-out totals more than £17,000, and the early date of payment will be particularly welcomed by dairy farmers. This final payment includes the further sum of .41d per lb butter recently announced by the Government. Adequate depreciation has been written off, and the company’s finances are in a very sound state. On a local market turnover of over £300,000 over the last three years the bad debts amount to less than £2OO. The directors recommend that a 4 per cent, dividend be paid to shareholders.

NEW YORK SHARE INDEX 00W JONES AVERAGE Railroads. Industrials. Turnover,

PRICE OF GOLD Press Association—By Telegraph—Copyright LONDON, August 16. (Received August 17, at 11 a.m.) Fine gold is quoted at £7 2s B£d per

Highest price in 1937, March 6, £7 2s 7sd; average price in 1930, £4 5s an ounce.

COMPANY NEWS DOMINION BREWERIES NEW SHARE ISSUE ONE FOR FIVE AT SI- PREMIUM (Pee United Press Association.] AUCKLAND, August 16. The directors of Dominion Breweries Ltd. announced this afternoon that it is proposed to issue 50,000 ordinary shares of £1 each to the existing shareholders at the price of £1 5s a share in the proportion of one new share for each existing five shares, whether preference or ordinary, held by shareholders on August 15. Shareholders’ notices will be posted on August 20. [The company’s last new issue was made on February 13, 1937, when the directors announced a decision to increase capital by £55,000 by the issue of 40,000 ordinary shares of £1 each at a premium of 7s 6d. The offer was made to shareholders in the first instance of one for every four shares held. In response to the offer, applications were received for 89,497 the amount over-subscribed being £50,000. The capital was required for the expansion of business. The company’s present capital is £250,000, in 210,000 £1 ordinary shares and 40,000 5 per cent, cum pref. shares.]

N.Z. FARMERS’ FERTILISER DETAILS OF NEW ISSUE CUM. PREF. AT 5* PER GEHT. PER ANNUM The fresh capital which the New Zealand Farmers’ Fertiliser Company Ltd. proposes to issue is to he in the form of 150,000 cumulative preference shares at 5i per cent, per annum. The directors intend to offer only 120,000 for immediate subscription and to hold the remainder in reserve. Existing shareholders will he given an opportunity to apply for the preference shares. In a circular to shareholders about the proposed issue, the managing director, Mr J. Wilson, says it will he evident from a careful perusal of the last balance sheet that the company is very much under capitalised. The assets aggregate close on £529,000, and the subscribed capital is only approximately £262,000. The rest of the working capital is largely provided by the bank overdraft, which at the date of the last annual balance amounted to £117,000. The meeting to consider the special resolution creating the new issue will be held in Auckland on September 8.

WINGHCOMBE, CARSON YEAR'S DIVIDEND DOWN The directors of Winchcombe, Carson Ltd., stock and station agents,. Sydney, have declared a final dividend of per cent., making 7J per cent, for the year ended June 30. Last year and in 1935-36 the company paid 8 per cent. SHARE QUOTATIONS Press Association—-By Telegraph—Copyright LONDON, August 16. (Received August 17, at 1 p.m.) Share quotations: Clutha River—buyers Is 7id, sellers Is lOJd; Molyueus—buyers 9d, sellers Is.

Popper- £ 6, d. £ s. d. Standard, spot ... 40 4 44 39 14 44 Forward , 40 11 3 59 19 44 Electrolytic, spot 45 10 0 45 0 0 Forward ••• 46 0 0 45 15 0 Wire bars 46 0 0 43 15 0 iLead— Spot 14 5 74 14 0 0 Forward ... ... 14 6 104 14 1 104 Spelter— Spot ... 13 10 0 13 3 9 Forward ... ... 13 14 44 13 610| Tin— Spot 192 15 0 191 17 6 Forward 193 17 6 192 17 6 Silver— Fine, per oz 19 7-16d 19 l-2d Standard, per oz 21d 21 l-16d

Aug. 16 27.96 138.44 610,000 Aug. 15 27.76 136.98 610,000 Aug. 13 27.57 136.21 400,000 Aug. 12 27.68 136.51 1,480,000 Aug. 11 28.57 139.32 1,100,000 Aug. 10 29.56 142.40 810,000 Aug. 9 29.80 143.21 830,000 Aug. 8 29.60 144.33 910,000 Aug. 6 29.77 145.67 830,000 Aug. 5 29.28 144.47 1,170,000 Aug. 4 28.16 142.13 610,000 Aug. 3 28.05 141.73 820,000 Aug. 2 28.33 141.97 820,000 Aug. 1 28.15 140.37 590,000 July 30 28.45 141.25 360,000 July 29 28.44 141.20 1,200,000 July 28 28.54 142.20 1,070,000 July 27 28.28 140.24 1,970,000 July 26 29.67 143.33 1,250,000 July 25 30.14 144.91 2,110,000 July 23 30.38 144.24 780,000 July 22 29.88 142.25 1,220,000 July 21 29.78 141.92 1,810,000 July 20 29.60 141.84 2,510,000 1938 Highest 32.33 145.67 Lowest 19.00 98.95 1937 Highest 64.86 194.40 Lowest 28.01 113.64

ounce. August 15 ... £7 2 8 August 12 ... 7 2 8 August 11 ... 7 2 44 August 10 ... 7 2 44 August 9 ... 7 2 74 August 8' ... 7 2 3 August 2 ... 7 1 8 July 1 ... 7 0 9 June 1 ... 7 7 04 May 2 ... ... 6 19 64 April 1 ... 7 0 04 March 1 ... ... 6 19 94 February 1 ... 6 19 7 January 3 ... 6 19 5