INVESTMENT REVIEW

Evening Star, Issue 25673, 22 December 1945, Page 10

INVESTMENT REVIEW

SECURITIES IN 1945 WIDESPREAD GAINS RECORDED Widespread gains were recorded during the trading year on the Stock Exchange which ended yesterday. All sections of the market participated in the activity, which carried prices up appreciably over the period. Following the impetus given by the end of the war, first in Europe and then in Japan, accumulated investment funds to to-day's limited front carried current prices to a very high level, and, although the market will not close at the peak point reached in some sections, ruling rates show wide gains on the prices which operated at the close of 1944. Shareholders of Dominion industrial and trading concerns remain, to a very large extent, the forgotten people so far as taxation is concerned. The lifting of 6d in the £ of national security tax will be reflected in company balance sheets, but the concerns which have been able to lift their dividend rate above the pre-war level are comparatively few, with the result that investors relying on income from this source have suffered as the price spiral has twisted higher. The new year, bringing nearer tho piospect of further taxation relief as the General Election approaches, should also see an increase in the appearance of new capital issues. The amount of surplus funds seeking investment avenues is a burden on the market, and the success attending recent flotations should encourage similar movements during the post-war rehabilitation year of 1946. Over all, 1945 was a year of buoyancy for the market, when prices advanced as much because of post-war industrial prospects as the record volume of currency in circulation. Gild-edged yields were forced down sharply during the year, the short-term 4> per cents, showing under 2J per cent., while the 3 per cents, have been whittled down to under £3. The levels of Government loans at the close of business, compared with the 1944 period, are:—

Banking shares experienced a hesitant year. The taking over of the Bank ot New Zealand by the Government was preceded by a wave of speculative operations iu the scrip at around 50s, while the bankin" legislation passed in Australai contributed to the uncertainties of investment, in the section. What the banks have lost over the year, insura.nce issues have gamed, and the headway made in this section has been little short of remarkable. Peak lovels were attained by seme leaders, but a reaction towards the close brought prices to a more uomiual level. End-of-the-year levels in the two sections compare as folloWS: ~ 1944. 1945.

The shortage of attractive investment avenues focused attention on Dominion industrials and trading shares, which came into their own during the year. Strong buying support sent the purchase price yields down to unusual levels," while two recent capital issues (Felt and Textiles and Turnbull and Jones) were heavily oversubscribed, demonstrating at the same time the new popularity of New Zealand issues and the amount of money available. Some companies had their troubles, mainly due to coal and supplies of materials, but in the main investors had reason to be satisfied with the progress recorded. The trend in New Zealand industrials was as follows :—.

Evidence of the substantial holdings of Australian stocks in New Zealand was given during the year. The lifting of ceilings in Australia tended tc bring Dominion and Commonwealth values closer together, but in some cases there is still a premium ruling in the New Zealand market. Most of the popular trans-Tasman leaders are now recovering from the setback occasioned by the industrial troubles. December prices of Australian stocks com-

BANK OF N.Z. STOCK. " With the close of the Stock Exchange year, Bank of New Zealand shareholders will be engaged in completing the necessary forms for the passing over of their shares, and will no doubt be wondering when those taking the taxable stock will be able to enter into transactions in their holdings," states the chairman of the Wellington Stock Exchange, Mr Andrew Hamilton. " Although the stock exchanges will not be able to take buying and selling quotations until they are advised by the Reserve Bank, probably early next February, that the registers are in a position to deal with transfers, it has been ascertained that the bank granted special assistance in the case of an estate in converting shares into 3 per cent, taxable stock, (maturing on November 15, 1957-60, with the result that a parcel of £21.540 changed hands between a firm on the Wellington Stock Exchange and a firm on the Auckland Stock Exchange after the final call yesterday. The sale price was £99 LOs." ' RESERVE BANK RECORDS. New record levels in the sterling exchange holding of the Reserve Bank of New Zealand and the active note circulation ere reported in the bank statement of assets and liabilities as at the close of business on December 17. Overseas funds held have risen by £1,536,513, a_ comparatively sharp increase, to the high figure of £78,192,128. The notes in circulation continue to teflect the seasonal increase. At £45,737,216 they are £762,456 higher than the previous week, and almost £4,500,000 more than the peak Christmas week issue of 1944. Demand liabilities to the State are almost £2,000,000 more, while the trading bank item is £3,000,000 higher. Advances to the Marketing Department are slightly higher, while the advances " for other purposes " have risen by £4,000,000 to £32,000,000. The' proportion of reserves to notes and other demand liabilities is stated at 68.663 per cent., against 70.773 per cent, in the previous period.

1944. 1945. £ s. d. £ s. d. 2£ p.c. , 194749 . .. 98 10 0 99 17 6 3 p.e., 3 p.c, 4 p.c, 4 p.c, 1952-55 .. .. 98 5 0 100 15 0 1953-56 ., ,. 97 10 0 99 15 0 1946-49 . .. 100 0 0 100 10 0 1952-55 . .. 104 0 0 107 0 0

£ 8. d. £ s. d. Commercial Bank ... 0 17 6 0 18 9 New South Wales ... 34 0 0 33 12 6 National Bank 2 12 0 . 2 14 3 Union Bank 8 4 0 8 2 6 National Insurance ... 14 9 1 6 3 New Zealand Insurance 4 9 0 4 19 9

, 1944. 1945. £ s.. d. £ s. d. Dominion Brew. ... 2 5 9 2 17 0 N.Z. Brow ... 2 3 0 2 6 9 Wilsons Cement ... ... 0 18 3 0 18 9 Woolworths (N.Z.) ... 1 1 0 1 4 3 New Zealand Drusr ... 5 2 0 5 6 0

pare as follows: — 1944. 1945. £ s. d. £ s. d. A.C.I .. . 2 17 6 2 16 6 B H.P . 2 4 9 2 6 0 Colonial Sugar . 56 10 0 58 0 0 G. J. Coles . 3 9 0 3 15 6 Elec. Zinc (pref.) . 2 16 0 3 1 0 Mount Lyell . 1 9 6 1 5 3 Woolworths (Sydney) 1 1 3 1 4 0