NEW ZEALAND STOCKS

New Zealand Herald, Volume LXXV, Issue 23048, 27 May 1938, Page 7

NEW ZEALAND STOCKS

LONDON SELLING OPINION IN THE MARKET EFFECTS OF LEGISLATION [from otjr own correspondent] LONDON, May 11 The price of New Zealand Government stocks has dropped approximately two points on the London Stock Exchange in the past month, a number of holders selling after the announcement of the now social services by the Prime Minister, Mr. Savage. The persistent weakness of these stocks, it has been confirmed, can be attributed to no other causa "The behaviour of the New Zealand Government has made a number of people very nervous," a prominent stockbroker said to-day. "Every effort has been made to check the fall, but with little success. It is impossible to forecast how long this weakness will persist. It depends a great deal, of course, on the action of the Government. At present, the only result of the fall is a certain loss of prestige to New Zealand, but if the position continues it is possible that some difficulty might be met in the event of the Dominion desiring to raise a new loan in London."

The fall has naturally ' been the cause of newspaper comment. "The weakness of Now Zealand stocks is almost certainly a reflection of fears as to political developments .in that country," the Glasgow Herald has stated. "This possibility caused a very moderate amount of selling orders and an exaggerated decline in the quotations for town Joans and similar securities, accompanied by a widening of the difference between buying and selling prices to 10 points in several cases. The latter is more important than the former to the would-be seller, and there can bo little "doubt that it arises mainly from the fact that individual loans so small. When the outlook is 'set fair' the jobber does not mind taking stocks on his books even although he knows ho may have to wait days, or even weeks, to get even again. As soon as there is any doubt, however, the narrowness of the market exercises a crippling influence." The Daily Express said: "The general view in the city is that although the new Bocial services, with the necessity for higher taxation, are likely to to increased costs of production in New Zealand, the increase will not jeopardise the trading surplus available for payment of interest on tho external debt. It is hoped that tho Parliamentary Committee now sitting in New Zealand to' examine the proposals will modify them, at least to a certain extent."

Since this report left London there has been a further easing in New Zealand stocks, reference to which was made in the Seralh on Wednesday. No further current quotations on the London Stock Exchange are vet available, except those for New' Zealand Loan and Alercantile stock. In the ordinary stock of this company there has been a recovery of £2 since last week and at £2B the stock stands at the level ruling during the first week of this month.

CABLE AND WIRELESS IMPROVED EARNINGS FIRST ORDINARY DIVIDEND In the address presented at the annual meeting of Cable and Wireless Holding, Limited, in London this week, Lord Pender, chairman, said the profit for the year was £265.000 higher at £1,208,246, to which must be added tho balance of £IBB,OOO brought forward from 1936. The directors had paid the dividend on tho 5J per cent cumulative preference stock, which absorbed £922,162, and they recommended the payment of a first dividend of 4 per cent on the ordinary stock, which required £275,324. and left £199,097 to be carried to 1938.

He expressed appreciation that tho accounts showed such a marked improvement.

As regards Cable and Wireless, Limited, the operating; company, their profit was £1,256,919, which was £414.000 higher than last year. Tho increase was made up as follows: Message receipts, £299,000; income from investments. £20,000; charter of ships, etc., £56,000; decrease in expenses and provisions, £39,000; total, £414,000. The substantial increase in profit was due to the rise in tho income of the company. Expenditure had now been comparatively stabilised and, as he pointed out last year, it was not probable that much further success could be achieved < in the way of economies, which would be obvious when it was remembered that the savings effected since the merger in 1929 had amounted to over £1,250.000 per annum.

The capital reconstruction scheme. Lord Pender stated, had laid a sound foundation for the financial recovery of business.

BUILDING SOCIETY STRONG POSITION SHOWN SHAREHOLDERS ASSISTED The progress of the Auckland Cooperative Terminating Building Society during the past year was reviewed by the chairman of directors, Mr. S. J. Harbutt, at the 41st annual meeting last night. He pointed out that tho society had assisted approximately 10,000 members to become owners of their own homes. Thousands more had received other benefits from their membership. Moving the adoption of the report and balance-sheet, which were published in tho Herald on May 18, Mr. Harbutt said he was delighted to see the increasing interest in the society. The accounts were most encouraging and they showed that the society still had tho entire confidence of tho community. This was, no doubt, the result of tho liberal and fair treatment extended to all its members. Explaining the society's plan, the chairman said that shareholders allowed their payments of a few shillings a week to accumulate, so that at frequent intervals one of the members was able to obtain the cash to purchase a home or to pay off an existing mortgage. The chairman made an appeal to shareholders to support tho four new groups, which contained 2000 shares each. Thcso groups would have their first payment on June 6, and the first ballot in July. Mr. Harbutt congratulated shareholders on the splendid results for the year and the strong position of tho society. He was confident that if every shareholder played his part, the society would continue its steady growth and increase its usefulness to the community. The report and balance-sheet were adopted, and the retiring directors, Messrs. S. J. Harbutt and J. C. Kntriean. were re-elected unopposed The shareholders' auditors, Messrs. Morris, Duncan anil Gyllies, were reappointed. At a subsequent appropriation meeting the amount offered by sale and ballot totalled £20,-100. One shareholder who bad intended to tender for a loan in his group was successful in winning a ballot of £BOO, as there were a ballot and a sale in his group.