COMMODITY MARKETS AND PRICES.

Manawatu Standard, Volume LVII, Issue 230, 28 August 1937, Page 4

COMMODITY MARKETS AND PRICES.

FAVOURABLE BALANCE-SHEETS. (By “Penloo.”) Favourable balance-sheets continue to be circulated, and the dividend list continues to grow. This is heartening investors and brokers', and the Stock Exchanges are being kept busy and business on the Exchanges continues good. It is not unusual, however, for a certain amount of slackness to be shown before the opening of a session of Parliament, but while there is no slackness to be noted on tho New Zealand Exchanges, it is rather significant that there is very little trading in bank shares, both here and in Australia. The reason apnears to be that there is some apprehension of banking legislation being introduced, while in Australia the Labour Party is determined on what it terms banking reform. But while balance-sheets are satisfactory and dividends are forthcoming, investors will operate and, as already stated, the balance-sheets issued are satisfactory. The. N.Z. Loan and Mercantile Agency Company, for the year ended .Tune 30 last, shows a profit of about £190,000 before charging British income tax, but after paying the national defence tax for three months. Tho chain stores, wherever established, show that they obviously fill an important niche in a country’s internal economy. Their business is on a cash and carry basis. Tho well-known Australian store of G. J. Coles and Co., Ltd., for tho year ended June 30, shows a net profit of £223,400, as compared with £154,854 in the previous year, and £131,445 for 1935. The gross profit for the past year was £1,199.511. The dividend on the preference shares is unchanged at 8 per cent., but on the equity shares the dividend is 182 per cent., as compared with 12J per cent, in the previous year, and 10 per cent, in 1935. During the year the company issued 163,070 ordinary shares at 40s each to ordinary shareholders on a one for five basis, and 14,580 ordinary shares to employees at 60s each. The premiums from the issue amounted to £192,230. Bonus shares-or gift shares were also issued to shareholders on tho basis of one for every 10 ordinary shares hold on July 31. On the premium of £192,230 the company will pay no dividend, but some of this is probably absorbed in the bonus shares. The reserve fund stands at £161.354, as compared with £118.354 in the previous year. The market price of the ordinary shares is about 90s. THE PRIMARY INDUSTRIES. We are now at the beginning of a new production year, and it seems to be worth while to canvass the. prospects. There are numerous definite indications that at least for another year or eighteen months trade conditions will be good throughout the world generally, but this is subject to there being no major disturbance, such as a big war. The League of Nations monthly trade bulletin for August shows that the gold value of world trade in the three months, April-June, of this year was 10 per cent, higher than in the preceding quarter, which is distinctly encouraging. But economists and others have warned us that when the defence programmes are completed a slump may follow. This may he correct from a long-range view, hut on the short outlook, that is, over a year or eighteen months, we need have no fear. So far as we are concerned we are so inextricably mixed up with Britain that our prospects depend upon economic conditions in the United Kingdom. Britain is spending very heavily on rearmament, and is speeding up the work ; nevertheless, Britain’s export trade is expanding and she is thus enjoying a great measure of prosperity and we are sharing in it. Our main and most profitable primary product is wool, and tlio outlook for wool is good. Stocks are comparatively low in all consuming countries, and in the producing countries there is no carryover. The world demand shows no signs of weakening, and that is revealed by the firmness of the Bradford tops market. The fact is that the purchasing power in primary producing countries has increased because of the higher prices received for their end tho increased purchasing power is bein tr used. Wool must hold its value. The only danger is as to the position of Japan. This country undertook to buy 800,000 bales of Australian wool this season, but it is doubtful whether that Cjn be done. But even with Japan buying less, wool will hold its position. Frozen mutton and lamb may see better prices in the coming season, for there is every probability that shipments from this Dominion will be smaller. Wool being much more profitable than the carcase, farmers are sure to bold on to their sheep, particularly tlie female stock. If there is a contraction in shipments, and business activity continues in . Britain, prices must improve. Beef prices may remain good, but we are not very strong in the export of beef. AV ith respect to dairy produce, it is bard to say what is likely to happen, and we must wait until the British agricultural policy is known.