AN INVESTOR’S NOTEBOOK

Evening Star, Issue 23335, 3 August 1939, Page 9

AN INVESTOR’S NOTEBOOK

BUDGET AND THE STOCK MARKET PRACTICALLY NO EFFECT ON PRICES Apparently anticipating the increased taxation burden, the investment market has displayed practically no reaction to the Budget- contents. Breweries certainly are- finding wider margins as the result of the beer duty increase, but valuations have shown little change. The general body of New Zealand stocks, industrial and others, have maintained a firm front. So far as companies are affected by the Budget increases, the smaller concern' suffers most. - Its basic rata has been increased from Is to 2s in the £, or a rise of 100 per cent., while companies operating under the maximum rate have experienced an advance of a shade under 6 per cent. The difference is surprising. It is to be expected that the larger taxation absorption will be reflected in balance sheets, but whether profits will be much affected will depend on the business of the individual concern. At the same time, it must be remembered that the social security charge now appears on balance sheets, while so far as most Dunedin companies ate concerned, greatly increased land valuations will eat further into earnings. The immediate investment effect- of the Budget will, it is expected, be reflected in quieter business. ■ • '■ *.•* • * A.C.I. Bonus. Australian Consolidated Industries is fulfilling what its predecessor, Australian Glass Manufacturers, was year to year expected to do. Its shares, it will be remembered, showed a comparatively poor return (something around £2 15s), mainly due to market operators keeping the price high in anticipation of i the long-expected bonus distribution. i

Those who held Australian Glasses and converted their holdings into A.0.1.s will have no cause for regret. The handsome 11 for 4 distribution made on the reorganisation earlier this year was satisfactory, while the 2 for 7 now announced adds to that satisfaction, although some are reported to be disappointed at the 6s premium.

Nigger in the woodpile is Canberra, which recently announced that its Tariff Board would conduct an inquiry into the affairs of the company on a charge of allegedly excessive profits, caused by what amounts to more or less a monopoly. Investors, and even shareholders may be enlightened at the extent of the true profits and profitearning capacity of this concern • * • Interest Rates. , The return to the investor on his outlay, based upon the latest dividends, works out as follows on the latest sales. Redemption and accrued interest are considered in the case of Government loans.

PRICE OF GOLD Press Association—By Telegraph—Copyright LONDON, August 2. (Received August 3, at 11 a.m.) Fine gold is quoted at £7 8s 6Jd on ounce.

During the European crisis at the end of September, 1938, the price reached £7 7s (September 28) On January 4, 1939, a record price of £7 ICte 5d was made. During February the price varied from £7 8s 74d (February 1) to £7 8s 2d (February 27). Highest price in 1939, January 4, £7 10s 5d (record). Highest price in 1933, November 26, £7 10s; lowest price in 1938. January 3. £6 19s sd. Highest price in 1937, March 6, £7 2s 74d; average price iu 1930, £-1 5s an ounce.

—Per cent. Per Annum.— £ a. d. Bank of New Zealand 5 0 0 N.Z. Insurance 3 16 10 South British 3 4 9 Commercial Bank ... 4 5 0 National Bank of N.Z. 6 7 2 Broken Hill Pty. ... 3 11 11 Colonial Sugar [Woolworths Ltd. ... 3 0 10 8 12 2

Aug. 1 ... • •• £7 8 6i July 31 ... ... 7 8 64 July 28 ... ... 7 8 64 July 27 ... ... ... 7 8 61July 26 ... ... 7 8 64 July 25 ... ... 7 8 6 July 24 ... ... ... 7 8 54 July 14 ... ... 7 8 5 July 7 ... ... 7 8 6 July 3 ... ... 7 8 61 June 30 ... • •a 7 8 6 June 1 ... ... 7 8 5 May 31 ... ... 7 8 64 May 1 ... a.. 7 8 6 April 21 ... «•* ... 7 8 6 April 4 ... March 31 ... 7 7 8 8 64 64 February 28 ... ... 7 8 3 February 2 ... ... 7 8 74 January 31 ... 7 8 6 January 4 ... ... 7 10 6