SHARE LOSSES

New Zealand Herald, Volume LXXIV, Issue 22839, 21 September 1937, Page 5

SHARE LOSSES

PERIOD OF DEPRESSION WALL STREET BLAMED LONDON'S UNHAPPY WEEK LONDON, Sept. 11) Wall Street is rapidly becoming recovery's public enemy No. 1. London was quite unprepared f<• r the wave after wave of selling, v.hHi moved even President Roosevelt to declare that investors were suffering from the "jitters." Mr. Roosevelt's Government, however, must bear a share of responsibility for the present debacle. Anti-spec-ulation measures have destroyed the market's normal cushion. Consequently unfavourable news produces a maximum of havoc. -Moreover, Wall Street seems to lack London's inherent sanity and behaves as though war were only a minute awav,

Wall Street's behaviour lias been a direct as well as an indirect shock to British investors ' who had backed American recovery to the extent of 410,000,1)00 dollars. Heavy losses which many had to face arc largely responsible for liquidation which has given London brokers the most unhappy week of tlm year.

The gilt-edged market has been the sole bright spot, Dominion issues sharing the firmness. Movements in foreign loans were wide and erratic. Industrials were mostly lower after a severe test in the middle of the week, when rumours of provincial difficulties were widespread, but still remained unconfirmed. Oils are not convincing, and rubbers have failed to respond to the strength of the commodity. The values of commodities also were disappointing, though comparatively steady compared with the stock 111 a rkets.

The sharp break in metals on September 1G appears to have been due to the liquidation of a stale "bull" account, built up early in August, and also to unfavourable copper statistics.

DECLINE IN AUSTRALIA PSYCHOLOGICAL EFFECTS Many holders of industrial shares arc asking themselves if there is anything fundamentally wrong with the market when tliev see the failure of prices to respond to favourable economic developments, states the Argus, Melbourne. lirokcn Hill Proprietary declared a record profit of £1,183,200, equal to more than 25 per cent 011 capital, only half of which was distributed, yet the shares failed to respond. Since then the weight of the new issue has assisted in pressing down the market by Us or 7s.

Dimlop-P.erdriau llubber lias Jiad a noteworthy revival, with almost a record profit of £109,760 —a gain of oncthinl on last year, and representing 8.4 per cent on ordinary capital —but the share prices have actually fallen, although showing the high yield of 6.2 per cent. These are typical examples of recent company performances. Higher dividends anil increased profits are the order of the day—strikingly indicative of the prosperity of Australian industries. Moreover, practically all companies are still exceedingly busy. Business continues to expand and demands for additional capital are expressed in newissues of shares —themselves a further source of benefit to fortunate shareholders.

]>i •ices of Australia's exportable products arc above the average of the financial year ended June 30 last, and the volume of this season, thanks to favourable seasonal conditions, especially in view of bounteous rains in Victoria and liiverina last month, promises to be normal. Overseas, the industrial situation and outlook are favourable. Britain is a hive of industry. Shipbuilding, an important indicator, is busier than ever nefore in history. Prosperity graphs in the United States, allowing for seasonal variations, are strongly on the upgrade. With all these encouraging factors in operation, an Australian index of industrial shares is 211.17, compared with the peak of 255.35 reached on Fcbrnarv 23 last; the London index is 126.9, compared with a "high" 1-12.9 recorded on January 4 last; and the Wall Street index is 159.96, against the peak of 194.40 attained on March 10 last. There is no reason in the world why confidence in Australian industry should bo affected by a fall in Stock Exchange prices in London or New York, but nevertheless, any serious break there lias a marked psychological effect ill the Commonwealth. In Australia, firstly the Federal elections, and now the general election in Victoria, have further induced a feeling of uncertainty in the minds of investors. Although markets here have not suffered any wave of determined selling, such as shook all Street last week, the "wait and see" attitude of hiivers and the quiet liquidation by nervous holders are having the effect of slowly pushing down price levels.

AUSTRALIAN - PRODUCE RECORD LEVELS REACHED BUTTER, BEEF AND FRUIT [FHOM OUK OWN connEsroNPENT] SYDNEY, Sept. 17 Three Australian industries, butter, beef and canned fruits, are credited by reports presented to the Federal Parliament. with record prosperity levels. Hotter is selling on the London market at flie highest average price since the l<i;(I-T2 season. Where only 8000 United Kingdom shops sold Australian butter when the publicity drive began a few years ago, it is now sold by 55,000 shops. Meef exports to the United Kingdom continue to show a steady increase. The figures for TJ.'iG were 1,803,000ewt., an increase of 6 per cent on the figures for ]!MS. According to present estimates, the total for this vear will exceed 2,.'lflo,ooocwt

The report of the Australian Meat Board also records an advance in tlio chilled beef trade. Exports to the United Kingdom increased from 55.000 cut. in 19.'51 to 2i)(s,OOOewt. in 1936. It is estimated that 41»,000cwt. will he exported in 1037. Canned fruits reached the highest ]ioint in the history of the industry, with a total pack of 2,328,292 cases for 193G-37, or 10(5,86.'} cases more than the previous year. Disposal of this production aild all surplus stocks is assured, and the market is improving in the United Kingdom, New Zealand. Canada, Southern Rhodesia and the British West Indies.

PUKEKOHE PRODUCE

NEW POTATOES 4$D PER LB.

[from our own correspondent]

PUKEKOHE, Monday

Two growers 011 l'ukekohe Dill commenced digging early crops of potatoes to-day, marking the opening of the new season. The opening value is approximately 4id per lb. Supplies are expected to increase fairly rapidly. Other lines of locally-grown produce remain in brisk demand, with carrots scarcer than a week ago. Savoy cabbages to-dav were selling at (is .'id a sack t.o.r. 'l'ukekohe, Henderson cabbages at -Is, and cauliflowers at 8s 3d, while carrots are at 7s Cd a sugar bag, beetroot Is Gd, swedes -Is, and lettuce at 8s Gd a case. Parsnips are unprocurable.