THE STOCK MARKET

Otago Daily Times, Issue 26027, 15 December 1945, Page 5

THE STOCK MARKET

UNEVEN WEEK'S TRADING MORE INTEREST IN MINING By Gregory. Business on the Stock Exchange suffered a check in the early part of the week owing to the preoccupation of brokers. with the Turnbull arid Jones flotation' and a quiet market persisted until Thursday, when the normal routine was resumed and resulted in fairly good trading in the closing stages. The dividend season is on the wane with less than a half-dozen companies to make declarations of dividends payable this year. Moie interest was shown during the week in gold mining shares, though the market —if not the world—awaits clarification of the Bretton Woods Agreement in its relationship to gold. Turnbull and Jones Issue The flattering over-subscription of the Turnbull and Jones issue must be largely attributed to the unprecedented stampede the Felt and Textiles flotation created in the previous month and the 100 p.c. premium to which shares rocketted. Once again the entire issue was over-subscribed by the applications of local investors alone, but it seems probable that discretion, in this case, bowed to speculative hopes, and it may be wishful thinking to presume that the recent issue has either the immediate or prospective value of the earlier flotation The most interested spectator of this further demonstration of the abundance of funds scrambling for investment will be the Minister of Finance, Mr Walter Nash, and it will probably provide him with practical encouragement, in his ambition to control investment which he can partly achieve by the still current Finance Emergency Regulations, 1940, No. 2. If he would restore to free enterprise its inherent right he would witness a stream of potentially dangerous money pouring into a self-determined bondage more effective against the hovering spectre of inflation than any directed investment he can devise. Government Loans The demand for New Zealand Government Loans was unabated and the paucity of sellers kept prices at a nigh level to return approximately 3 per cent, subject to National and Social Security Tax. In normal times this type of investment has a liniited appeal to the average share investor, who forsakes the stolid certainty and safety of Government loans for the higher return and prospects of capital appreciation offered by sound industrial shares. To-day, however, many of these investors, by reason of their patriotic response to the various War Loan appeals, are holders, and not inconsiderable holders, of this type of investment. They like it less as a depository for their savings and idle funds, but the scarcity of shares has compelled a retention of the holding. The real sacrifice made by these investors in responding to the appeal for the investment of their funds was not so much in seeing their new loan scrip depreciate a few pounds or so immediately after application but in relinquishing the opportunity of buying the share investment of their choice on the rising market which has prevailed throughout a period which embraces the last four big War Loan campaigns. The following table, which goes back to, say, the third Liberty Loan, launched in 1943, and instances 10 stocks covering a wide assortment of shares, shows tne appreciation that has taken place in the intervening two and a-half years. The calculations are based, in each case, on the purchase of 100 shares without regard to the difference in capital outlay:—

In contrast to this impressive array of market rises an investment in War Loan would to-day be worth its face value of £IOO. Unlisted Shares The sustained interest in Felt and Textiles of New Zealand, Ltd., shares kept the unlisted section disproportionately active and price changes over the week though slight were inconsistent in the four main centres. On a day when sales were made in Auckland or Wellington at 39s 9d, sales would be at 40s 3d in Christchurch and Dunedin, whereas the weight of buying orders to the north and selling orders from the north as a consequence reversed the values in all centres on the following day. A parcel of Ross and Glendining shares was disposed of during the week at 375. These shares are rarely available to the public and are in keen demand when a holding is beingliquidated. The company’s finances are in a snug position and the added fillip of war contracts has enabled a 2 per cent, bonus to be paid during *the war years to bring the anrtual distribution to 8 per cent. Selfridge’s, New Zealand, the northern chain store group, had business at 13s 3d and the market closed threepence on either side of that figure. With election year in the offing, final demobilisation pending, gratuities credited up as a collateral to spending power, and the universal family allowance and minimum wage “ around the corner,” the chain stores promise to set new turnover records next year, and those of them that entered the restricted years of war without accumulated reserves or goodwill must inevitably attract attention now on 1946 prospects,

3 > a'W <2 Cost June 1943 Present Value Capital •eciation estment, or rise £ £ p.c. Southland Frozen Meat 190 290 52.6 National Insurance 115 130 13 N.Z. Refrigerating 128 157 22.6 N.Z. Insurance .. 400 505 26.25 Brucfe Woollen .. 135 188 39.2 N.Z. Breweries .. 185 232 25.4 K.P. N.Z. Drug .. 445 525 18.8 D.I.C 88 110 25 Woolworths, N.Z. 76 120 57.8 National Electrical 135' 170 25.9