INVESTORS WELCOME NEW ZEALAND LOAN

Manawatu Times, Volume LIV, Issue 6811, 15 January 1929, Page 7

INVESTORS WELCOME NEW ZEALAND LOAN

Preferred to Indian Issue lower interest rate PREDICTED IN FUTURE STRENGTH OF GILT-EDGEDS. United Press Association —By Electri* Telegraph —Copyright. LONDON, Jan. 12. The Stock Exchange has opened tho year in good form and there has been considerable activity in most departments, especially in speculative shares, in which America has been operating. Gilt-edged, though not over-active, remain very firm despite the fact that two large loans, Indian and New Zealand, made their appearance. Both were cordially welcomed, as the market was not over-supplied with investment stocks of this class. The underwriters received 23 per cent, of the Indian Ran, but the cash portion of the New Zealand issue, which had received ths most favourable Press comments, waj over-subscribed the day before the date announced for the closing of the lists. The conversion portion of the issue remains open for another fortnight and a satisfactory response is expected, though some newspaper critics suggest that the conversion terms do not appear to be very generous when compared with the issue pnice of the cash offer. But it will be surprising if the holders of maturing four per cents, do not accept the offer. If the financial and industrial conditions continue to improve as now, it is pretty generally expected, though, of course, there may be a temporary setback, that the tendency will be for borrowers to pay a lower Tate of interest, and it may not be many years before the interest rate on new Dominions’ loans will be four per cent., or even lower, so that for a sound, profitable investment the New Zealand 4J per cont. seems hard to beat. The position of gilt-edged has been improved by the better monetary conditions arising from the reduction of the Berlin bank rate to 61 per celit., after standing at 7 per cent, since October, 1927. It is hinted, semi-officially, that a further reduction to 6 per cent, may be expected before long. Apparently Germany has now obtained sufficient gold for her requirements, and there does not seem any likelihood of a resumption of purchases here for export to Berlin.