NEW ZEALAND CAPITAL

Greymouth Evening Star, 28 July 1936, Page 7

NEW ZEALAND CAPITAL

NOT FLEEING TO AUSTRALIA EXCHANGE CHAIRMAN’S VIEW I [PEB PRESS ASSOCIATION.] CHRISTCHURCH, July 28. The contention that the comment cabled from Sydney yesterday, alleging that the flow of money from New Zealand had contributed largely towards the higher market prices of Australian industrial stocks, was not altogether fair, was made in a statement this morning by the President of the Stock Exchange Association of New Zealand (Mr. H. Kitson). Not more than ten per cent, of New Zealand money at present being invested in Australian securities, he contends, could be attributed to the nervousness through the Labour Government’s financial policy. “It must be remembered,” said Mr. Kitson, “that May, June and July are months which in the ordinary course of events are most active tor investors. They have by then passed March with its taxation obligations and these three months provide time when any idle funds come into the investment market.” Dealing with the suggestion of a strong swing by New Zealand investors towards Australian securities, Mr. Kitson said those who sought to place money in industrial enterprises had always tended towards Australian -shares, no matter what Government was in power. New Zealand was not a big manufacturing country and it was perfectly normal for the investor to look towards Australian industrial companies for investment of some of his funds. “Except for a few New Zealand stocks,” he continued, “there has been no noticeable selling pressure at all in recent months. The delay and I suppose it is necessary delay,—in the presentation of the Budget has given the opponents of Laboui a. chance to put ridiculous rumours round the country. There is always a certain amount of nervousness which greets any disturbance of any kind anywhere, and it is unfair to shouldei the Government with the responsibility for any outflow of money from ‘the country. Factors to be considered in the estimate of the present position are that there has been a gi eat improvement in the economic condition of Australia in the last few years, and an improvement in dividends by well established and well managed industrial firms, which has made investments attractive. Speaking generally, I hold that not moie than ten per cent, of New Zealand money being invested in Australian securities is due to nervousness by the people of New Zealand on account of the present Government.” “Another factor to be considered is that during the last five years, many wild cat schemes have been floated in New Zealand where investors have lost their money, and people are now looking for well established companies in which to place their surplus funds. Any new flotation, where there is good chance of profitable trading, is met by New Zealand investois with ready response.” ./