THE INVESTMENT MARKET

Otago Daily Times, Issue 26607, 1 November 1947, Page 3

THE INVESTMENT MARKET

Higher Level of Prices AUSTRALIAN ISSUES STRONG By Gregory. Moderate business was transacted on the Dunedin Stock Exchange this week, but for buyers sound industrials were just so many will-o-the-wisps, and limited business only was possible, with sellers ever retreating as buyers obligingly advanced. Australian industrial shares were very firm with improved turnover. A.C.I. had buyers up to 65s 6d and Colonial Sugar moved strongly to £59 on dividend expectations. Broken Hill Proprietary treated holders to a flash of its old generosity with an increased interim at an annual rate of 3 1-3 per cent. The shares responded to close “ ex" the dividend 52s (buyer) and 52s 9d (seller). Amongst metal producers Lyells at 30s were unchanged after a week's trading, but Broken Hill South clearly demonstrated optimistic expectations of the final dividend which is due for declaration. One shilling and three pence per share was handed out at this time last year, when the shares had a value of 35s 3d but current expectations are reflected in the present market of 43s (buyer).

The trend of prices during October was hard on buyers, but sellers once again enjoyed the full advantages of the dominant role they have practically monopolised since the black, days .of the war. In the following table the prices as at October 31, of a dozen selected stocks are compared with their market value at the beginning of the month.

Almost the only defections involved the insurance group, which fell under a cloud with the introduction of the proposed State monopoly of Workers' Compensation insurance, but not all of these were adversely affected, as the following table shows:—

Mount Morgan Company Mount Morgan shares climbed all week and reached a peak on Thursday morning, when a market of 10s 8d buyer and 10s lOd seller was established. Before the stock was “ called ” in the afternoon, however, the telegram advising the monthly return was read and produced a chorus of sardonic murmurs—and a more cautious buying offer. The company’s financial year ended on June 28, and if it can be' assumed that the £SOOO odd profit for the four weeks ended June 29 was represented by estimate in last year's figures, then the loss in the opening four months of the current year is raised to £16.063 by the deficit of £5019 reported for October. The annual meeting was held in Sydney on Thursday afternoon, .but at the time of writing no information .is to hand as to the business that transpired. It may or may not have been entirely coincidence which caused the annual meeting to fall on the day on which the October return was due for announcement, and shrewd operators may possibly have anticipated a good “ propaganda ” return for announcement to the assembled shareholders. Balance sheet figures, of course, give promise of an early interim dividend, but a share which has been held at 200 and 300 per cent, premium throughout the war years without paying a solitary threepence has no need to become excited about a slowly accumulating dividend potential. A guess is made that the chairman would forecast at Thursday’s meeting an early resumption of dividends, but would liberally qualify his prophecy to embrace every likely adverse contingency. Felt and Textiles The final chapter of the deal in Felt and Textiles of New Zealand shares which caught the limelight last week was written on Thursday with the announcement from the directors of Korma Textiles that the whole of the ordinary shares of that juvenile Auckland industrial had been purchased by the parent Felt and Textiles of Australia. Subscribed ordinary capital of Korma is £125,000, all of which was held by the originators of the business, who in 1939 brought one knitting plant from Australia and commenced operations in Auckland just in time to capture a generous share of the war-time woollen trade. The partnership affair quickly expanded, and was formed into a private company in the following year. New premises and additional plant were acquired, and key operators were brought from near and far for the rapidlygrowing business. In 1946 the private company took the first step towards selling out, and a public company was formed with an authorised capital of £400,000, of which the private vendor company took £125,000 • ordinary (£75,000 allotted free by way of part payment) and the public scrambled for £125,000 5 per cent, cumulative preference. The second step was taken last week, when the. ordinary shares were sold as a parcel 'to Felt and Textiles of Australia at an undisclosed figure, but one which probably includes a substantial premium.

Oct. 1. Oct. 31. £ s. d. £ s. d. N.Z. Rcfrig. (cont.) 0 17 10 1 0 0 Macduffs, Ltd 2 8 9 2 15 3 Woolworths, Ltd. 1 3 0 1 4 3 Colonial Sugar 55 5 0 59 0 0 N.Z. Paper Mills 2 3 6 2 5 6 B. Broken Hill Pty. .. 2 11 0 2 12 3 ex Woolworth, N.Z. .. Mount Lyell .. 1 8 9 1 11 0 1 8 9 1 10 0 Ballin's Brewery 1 14 6 *1 1G 3 Mount Morgan 0 9 6 0 10 6 K.P. N.Z. Drug .. 5 13 0 *5 14 0 N.Z. Breweries .. 2 15 0 2 18 3 '■‘Buyer

Oct. 1. Oct. 31. 1 £ s. d. £ s. d. N.Z. Insurance .. 4 19 6 5 1 0 National Insurance 1 7 0 1 6 ; 6 Standard Insurance South • British In4 11 0 4 8 OB. surance .. .. 4 12 0 4 11 OB.