INVESTMENT OUTLOOK

New Zealand Herald, Volume LXXV, Issue 22975, 1 March 1938, Page 7

INVESTMENT OUTLOOK

INFLUENCES IN LONDON ADVANCE OF GERMAN POWER STOCK EXCHANGE ATTITUDE In a comment upon investment conditions in London following political developments between Germany and Austria, the Economist stated that the market viewed the implications of the Austrian crisis more gravely than any other political development since the reoccupation of the Rhincland. Kven gilt-edged stocks wero affected. The Financial News index of ordinary share prices touched 86.9 on February 17, breaking the November low level of 93. It is clear that the factors influencing the present course of prices are not economic, but psychological, the journal says. The extent of the fall of share prices is not based on a consideration of future earnings nor on the length to which any trade depression conceivably might go. Moreover, present prices have not been the inevitable sequel of topheavy speculation, because the bull at present is almost an extinct animal in London. The whole market has been oppressed by the thought that every advance of German power in Europe brings nearer the apparition whose name is inimical to the very idea of investment. From purely economic grounds the Stock Exchange has probably little to fear. Although the belief that some degree of trade recession is coming is more widespread than three months ago there is probably no section of public: opinion which imagines that its intensity will be anything like that of the last depression. Dividend yields of 5 i>cr cent or more on high-grade ordinary shares discount more than even a moderate falling-off of earnings. But the Stock Exchange has no basis even for beginning any mathematical calculation of the results of any progressive deterioration of international law and order. DE-STERILISING GOLD UNITED STATES POLICY OPINION IN LONDON Commenting on the intention of the United States to de-sterilise more gold, the Statist, London, savs that it is very much open to question whether it will succeed in its anti-deflationary objective. The deflationary phase through which the Uni'ed States is passing has nothing to do with the restriction or the deficiency of credit, and mere accentuation of easy credit by further expansion of unutilised reserve balances ot the banks will in itself avail nothing without restoration of business confidence and willingness of private enterprise to use additional credit. The Investors' Chronicle, London, comments similarly. It savs that the chances of improvement in commodity prices are certainly a bit bettor, knowing that the Roosevelt Administration considers them too low. A warning cry of inflation has been heard so often in the last few years, however, that it is most doubtful whether this alone will be sufficient to cause any sustained rise in commodity prices 'or business activity. The tremendous increase in the world's stock of monetary gold in the last few years suggests; strongly that the general trend of commodity prices in the next few years is likely to be upward. DUNLOP-FERDRIAU HIGHER INTERiM DIVIDEND The Dunlop-Perdriau Rubber Company, Limited, Melbourne, has declared an interim dividend of 5 per cent on preference shares and 3$ per cent on ordinary shares for the half-year ended December Hi, payable on March .'ll. Last year an interim dividend of 3 per cent was paid and a final dividend of 4 per cent, making 7 per cent for the full year. PROSPEROUS MINES WITWATERSRAND RECORD The Witwatersraiid goldmining industry in South Africa has closed the year 1937 on a note of confidence and optimism. Although final figures have not yet been published, it is already certain that the industry will have established several new records. For the first time milling will reach 50,000,000 tons. Since the abandonment of the gold standard the tonnage lias gradually increased, while the average grade has dropped from 6}dwt. in 1932 to 4Jdwt. in 1 ( J37. In other words, little more than three tons of rock yielded one ounce of gold in 1932, while to-day 4J tons arc needed to produce the same amount. . . , Whereas the industry made £14,71 L.56-1 in profits in 1932, thejigur'e for the first 11 months of 1937 was already £29,133.788, which, together with the December figures, will constitute a fresh record. A new record in regard to wage outlay will also be established. While £45.775,622 was paid out bv the industry in working costs in 1936, £44,393.417 was paid out in the first 11 months of last year. IRON AND STEEL FULL OUTPUT CONSUMED Active conditions continue to rule.in the iron and steel markets, .and although production is at a record level the full output appears to be passing into consumption, says the official report of the London Iron and Steel Exchange. 11l one or. two departments slightly easier conditions have developed and this has given the makers an opportunity of reducing their arrears of deliveries. In the pig-iron market'there is now no stringency in any branch. This is chiefly duo to the increased home production, and purchases of foreign iron are now seldom heard of. There has been a considerable improvement in the situation in the semi-finished steel market. Most of the re-rollers are now receiving adequate supplies. New business on home account in finished steel has become rather more active. The export demand is somewhat irregular, but lately th?re has ficen an increase in the volume of enquiry for several overseas markets. SRAREBROKER'S DEATH [BV TRLRGBAPH —I'RKSS ASSOCIATION*] WELLIXGTON T , Monday No morning call was held on the Wellirgton Stock Exchange to-dav, on account of the death of Mr.< Arthur Stephen MacShane, who was a member of the firm of Dymock, MacShane and Sclanders, sharebrokers. NEW PUBLIC COMPANY The following public company, has been registered in Auckland:— Aluminium Utensils, Limited, to acquire as a troinK concern (lie manufacturing business of (lie company known us Metal Products, Limited, and manufacture and deal in aluminium and other metal wares. Capital, XL'.",11(10, in .11 shares. Subscribers: T. Buxton, T. S. Littlejohn, X. J. Hamlin and. L. X. Ross, i shares each; W. G. flairs, W. Crawford Young and C. V. Connolly, one share each.