INVESTMENT MARKET

Otago Daily Times, Issue 26245, 31 August 1946, Page 3

INVESTMENT MARKET

Dunlop Company’s New Issue

RECORD OVERSUBSCRIPTION

By Gregory

Although normal trading on the Stock Exchange was relegated to the background in the week which terminated yesterday, a fair turnover was nevertheless achieved and prices showed S continued inclination to harden. National Tobacco informed shareholders of a proposed new issue and sought authorisation of a capital increase for that purpose. Milburn Lime and Cement managed a final dividend of sevenpence to bring the annual distribution to 5 per cent., and the market appreciated the significance of the increase, small though it was, by an improved offer. Dunlop (New Zealand), Ltd., formally opened its lists at 11 a.m. on Thursday to receive applications for its issue of 500,000 cumulative 4J p.c. preference shares and 300,000 ordinary shares, and was able to announce an immediate over-subscrip-tion and the automatic closing of the list. Rarely have brokers’ offices been so besieged by anxious and clamant buyers, and it is worthy of mention that the dignity and decorum of the customary cheque book settlement was rudely disrupted by the unusual experience of literally fistfuls of five and fifty pound notes

tlon of handsome commissions for the wool-handling agencies. Wright, Stephenson. and Co. ordinary shares are the mystery stock of the market, and with an erratic buying quote, which varies between 35s and 38s 6d, the first appearance of a reasonable seller is awaited with interest to establish a sale price which, in any event, will certainly be at least five shillings above the highest recorded sale this year. Last week the 3s rise in Felt and Textiles of New Zealand was remarked, but this was improved on during the week to the extent of Is 6d, when sales were made at 57s 6d. The shares are high priced, but. the company is young, the capital low and prospects bright, and the combination of the latter three factors might well be digested by those looking for a lock-up stock. The lure of a bargain was well demonstrated during the week bv the invasion of brokers’ offices by those avidly applying for Dunlops. but bargains are not "price-ticketed on the Stock Exchange and are to be found only by the exercise of a reasonable degree of judgment and, frequently, courage. It was contended last week that buyers are now looking for a justification of the present price of Felt and Textiles of New Zealand other than that usually associated with" dividend, etc., and this can be amplified by pointing out that since its incorporation as a public company less than a year ago, two new associate companies have been launched and financed, and the progressive and alert direction which the company enjoys will ensure a continuation of the expansionist policy of this young industrial. The apparent high price of the shares should not be allowed to act as a deterrent, but should be viewed as a substantiation that informed opinion puts a high value on future prospects. Australian and New Zealand Prices The illustration given last week of the discrepancy that exists between Australian and New Zealand prices due to the application of the “ ceiling price ’* restriction in the former country, has prompted a certain amount of inquiry—particularly by those possessing funds in Australia—whether or not they can take advantage of the low prices ruling perforce in that country. The question is one which should be discussed with the inquirer’s broker, but in the main it can be stated that the opportunity does not, on the face of it, exist, as any New Zealand buyer immediately enters a field already highly competitive, and it is doubtful if an Australian broker, on the rare occasions when he can buy, would favour a New Zealand agent in preference to a client. To illustrate the demand for shares at their relatively low prices in Australia, the case can be cited of 100 Broken Hill Proprietary shares offered on the Melbourne call two weeks ago. Forty buyers clamoured for the small parcel, and, as usual, the successful buyer was selected by ballot. Preference shares are not subjected to a “ ceiling," however, and from time to time opportunities do exist to acquire approved holdings. but a further obstacle exists in the matter of securing the necessary permit from the Reserve Bank to enter into negotiations.

being thrust into brokers’ hands. In the absence of any details as to the extent of the over-subscription it would be mere guess-work to suggest a figure, but if the lead given by local applicants was typical of the rest of New Zealand, a reasonable estimate would be that at least two million in excess of requirements would be tendered for the preference alone, and that the ordinary would enjoy a* proportionally high over-subscription. New Band of Investors The preference issue had the effect of introducing a lairge body of new investors to the Stock Exchange who can be identified as habitual mortgage investors standing out of income as a result of repayments and who are attracted by the rate of interest, the liquid form of the investment and the world-wide reputation of Dunlops. Loan and agency shares have come in for more attention lately, and this can be attributed to the scheduled resumption in the summer of the auction method of wool disposal, which, taken in conjunction with the expectation of a good competitive demand, will mean a restora-

DUNEDIN QUOTATIONS

Buyer. Seller. ’ £ s. d. £ s. d. Government Loans— 2J p.c. Stock, Sept. 15. 1947 .. 2J p.c. Stock, June 15, 100 7 6 — 1947-49 99 12 6 100 0 0 21 p.c. Stock, May 15, 1948 21 p.c Stock, Feb. 15, 99 17 6 - 1949-50 98 15 0 —* 21 p.c. War Loan, Oct. 1, 1953 3 p.c. Stock, Aug. 1, 98 5 0 - 1951-54 99 15 0 100 5 0 3 p.c. Stock. Sept'. 15, 1952-55 3 p.c. Stock, May 15, 101 0 0 - 1953-56 3 p.c. Stock, Dec. 15, 100 5 0 1953-56 3 p.c. Stock, Feb. 15, 100 0 0 1955-58 99 12 6 100 0 0 3 p.c. Stock, April 15, 100 10 1960-63 .. .. .. 0 101 0 0 3 D.c. Stock, 1957-60 100 5 0 100 10 0 3 p.c. Stock, Jan. 15, 100 10 1956-59 4 p.c. Stock, May 15, 0 104 0 1949-52 0 — Wool Bonds, 1948 .. 1 1 6 1 2 0 Wool Bonds, 1949 .. 1 1 1 Banking— 8 Commercial (10s) .. Commercial of Sydney 1 2 24 2 5 6 1 2 (£12 10s) .. •• 6 8 E.S. and A. (£3) .. 6 2 6 7 National of N.Z. (£2 3 3 3 Natl? of A'sla (£10) 15 0 0 10 — Union (£5) •• •• Insurance— 9 National (7s) ... .. 1 8 10 1 3 New Zealand (£1) •• 5 0 U *7 South British (10s) .. 4 10 0 9 } Standard (£1) •• 4 8 3 Loan and Agency— L. and M. (ord.. £100) 83 0 0 86 0 0 Coal— Kaitangata (16s) 1 4 0 1 5 0 9 Westport (10s) .. .. 1 5 Wool— Bruce (ord., £1) 2 2 0 2 3 6 Bruce (pref., £1) 1 11 0 1 10 Kaiapoi (ord., 17s) .. Kaiapoi (pref., new) 1 6 1 6 9 1 8 0 Felt and Tex. of N.Z. 2 17 6

Buyer. Seller. £ s. d. £ s. d. Miscellaneous— Anthony Hrdn. (£1) 1 4 6 British Tobacco (£1) . 2 18 9 — Brok. Hill Propy. (£1) 2 9 6 *— Colonial Sugar (£20) 61 15 0 — Dom. Rubber (£1) .. — 1 3 0 Fletcher Hldgs. (ord.) 1 18 0 1 19 0 Fletcher Hldgs. (pref.) G. J. Coles Ul) .. 1 14 4 10 0 6 John Bulleid (10s) .. 0 18 0 0 19 0 Macduffs (ord.. £1) 1 7 4 — Macduffs (pref., £1) —• 6 1 9 3 Milburn Lime (£1) 1 16 — McLeod Bros. (£10) N.Z. Forest Products 32 10 0 6 0 61 0 5 N.Z. Paper Mills (£1) Otago Daily Times 2 2 2 12 6 9 2 S' 2 14 0 0 Reid Rubber .. .. 1 12 9 Woolwrths (Syd., 5s) — 1 9 0 Woolwrths (ord.. 5s) — 6 1 8 7 Woolwrths Prpts (£1) 1 13 — Woolworths (S. Africa, 5s) 2 8 0 — Woolworths (W.A.) •• 5 12 6 Breweries— 6 Ballin’s (£1) .. .. N.Z. Breweries (£1) 1 11 9 1 12 2 17 6 Dunedin (£1) •• •• 1 15 3 — Westland 2 3 9 — Mining— Brok. Hill South (5s) 1 18 0 2 0 0 Mount Lyell (£1) 1 5 5 1 5 9 Mount Morgan (2s 6d) 0 8 8 0 9 3 Rawang Tin (10s) .. 0 10 6 0 12 9 Clutha River (2s) .. 0 3 4 0 3 Waitahu (5s) .. 0 0 5 ~ Unofficial List Korma Textiles (pref.) 0 13 9 0 14 0 A. and T, Inglls .. 0 16 6 Ross and Glendining Coull Somerville 2 8 1 6 6 Wilkie 0 Mack. Caley Phoenix 2 0 6 Otago and Southland Finance .. •• •• Otago and Southland 0 2 0 8 9 - * 9 Finance (17s 6d p_d.) Otago Farmers’ Coop. (ord.) 6 2 7' — Otago Farmers Co6 op. (A pref.) .. Barningham and Co. 1 0 o“ 1 0 Snowhite Laundry 0 19