THE STOCK MARKET

Otago Daily Times, Issue 26033, 22 December 1945, Page 5

THE STOCK MARKET

MOMENTOUS YEAR CLOSES FIRMING TREND OF PRICES By Gregory Brokers closed their doors yesterday on a year made momentous by the sweeping victories of the United Nations in the international field and the steady march of Socialism in the national field. Few stocks remained unaffected by one cause or the other—some even disappeared—and prices generally underwent a big change in the 12 months but these changes almost without exception were upward movements, as was to be expected in a period which embraced the transition from war to peace. The full benefit of the winning of the peace will not be reflected in New Zealand stocks until next year, when the Minister of Finance will no doubt concede belated taxation relief, and for the majority of industrial shares this factor should justify the continuance of the upward trend. Restrictions Remain Theoretically, the closing months of the year should haye brought an end to irksome restrictions, controls and the rigmarole of permits and consents occasioned to some extent by war, but in actual fact they remain, still masquerading under the obsolete title of Finance Emergency Regulations to greet brokers when they re-open in the New Year. Although Australian Stock Exchanges suffered rashly advised and harshly devised “ ceiling ” price restrictions during the war, a clear-cut statement fixing the date of the ending of the war has been made, and the promise given that all restrictions will be removed at the expiration of a further six months (March 1). In New Zealand the investment outlook is not so promising, dependent, as it is. on legislators who through the war years gave disproportionate attention to their petty plans of State Socialism when the whole country 'Should have been giving its unrestricted efforts and resources to aiding Britain and her Two industrial flotations were handled by the Exchanges, and they were a pleasant change from the monotony of war loans which had been the sole new issues to engage the attention of brokers during the preceding five years. Three companies, Reid Rubber, Kempthome, Prosser, and Kaiapoi Woollen, expanded capital by. calling on shareholders, and in the aggregate they absorbed £192,000 of investment moneys. The Bank Transfer Holders of Bank of New Zealand shares received application forms during the week as a prelude to the final act in the plunder of their property, and were naively informed of the three options “ conferred ”on them. It cannot be too strongly stressed that the great majority oi holders should consult their broker before exercising an option. • The Stock Exchange Association has been in constant touch with the Minister of Finance seeking clarification of such detail as was not specifically explained, and members are accordingly more fully informed than shareholders and well able to advise them. One point worthy of note in connection with the option given to holders of the tax-free stock to convert at their pleasure to the 3 per cent, taxable stock is that, whereas if they exercise an original option for the 3 per cent, taxable issue they will receive £266 13s 4d worth (or more strictly £265 and a cash payment of £1 13s 4d), while, if they desire to convert an original holding of tax-free stock at a subsequent date, they will only receive £230 of it, plus cash for £3 6s Bd. ’ Broken Hill Proprietary shares responded promptly to the prospects of the strike settlement in Australia and from a depressed 45s a week ago closed the year with strong buyers at 46s after business at that figure. The Communists have unquestionably done their “cause” incalculable harm by the abortive rising, but it is not unlikely that they have rendered, _ albeit unconsciously, a distinct service to Australian industry by consolidating it —employer and employee—against further doses of their quack political potions. Their inaccurate assessment of the psychology of the peoples upon whom they would inflict their regime should have taught the Communists by now that it will be necessary to lower the school-leaving age before Australian mass intellect will be such that it will submit to the fetters of foreign regimentation. Government Issues Pending A large conversion of New Zealand Government loans will be undertaken next month, when nearly £9,000,000 of 1946-49 4 per cent. Stock will be matured under the Government’s option, and in its stead a 3 per cent, issue will be offered with a currency of 17 years with the usual option of repaying three years earlier. A further issue, a non-transferable Stock which represents the purchase of Reserve Bank shares in 1935, is to be redeemed on April 1, and the Government will also seek application for a new loan at 3 per cent, to mature in 1963, with an optional date of two years earlier.