HEAVY FALL IN SHARES.

New Zealand Herald, Volume LXVI, Issue 20309, 17 July 1929, Page 11

HEAVY FALL IN SHARES.

ROYAL MAIL COMPANY.

SHAREHOLDERS FEEL ALARMED

Australian and N.Z. Press Association. (Received July IG, 9.55 p.m.) LONDON, July 16. The Daily Telegraph says the stockholders in tho Royal Mail Steam Packet Company are becoming alarmed at tho recent heavy fall in their holdings. Ordinary shares, which were quoted at £76 earlier in tho year, closed at £4O yesterday. The fall in all the stocks of the company represents an aggregate decline this year ol' £4,500,000.

The company's shares were quoted a month a.go at £6l, ex-dividend, this being "the lowest record reached in recent years." The Statist of Juno 15 says:— The decline has evidently been due to dissatisfaction with the chairman's speech at tho annual meeting. Comment was' made on the auditor's report which accompanied tho accounts, tho reservations regarding tho value ot the shipping investments "under present conditions" being taken to mean that those holdings were over-valued, and, further, that attention would not have been called to the reduction in the allowance for depreciation of the fleet were it not that the provision was considered inadequate. Both inferences may have been incorrect, but the chairman could have been more explicit in his speech, for in dealing with the investments he simply stated that "their value was what they were worth to tho company"; which was not the same as stating that they were moderately valued, though the valuation was less than cost and less than the par value.

The trade outlook for the current year is evidently considered to be favourable and, were it not for the uncertainty regarding the value of the company's investments and fleet, it might lie said with some assurance that the ordinary stock is undervalued at the present price. Other shipping shares have also been somewhat depressed, tho prospect of keener German competition in the Atlantic being evidently viewed with uneasiness. Thus Cunard have fallen to 24s 4J,d, which compares with about 33s some time before the publication of the last annual report. The present price would appear to be unduly low, but hero again there is tho difficulty of appraising with any certainty the shares of a company whose published accounts are very incomplete. There is, however, good reason to believe that in this case tho assets are considerably undervalued.