Buyers Display Increased Interest

Otago Daily Times, Issue 26719, 13 March 1948, Page 3

Buyers Display Increased Interest

CHAS. BEGGS IN DEMAND

By Gregory A spurt to business on Wednesday saved the week from inclusion amongst the very infrequent dull patches which the Stock Exchange has experienced in the ,past year or two. Actually good turnover was achieved despite a poor beginning and a quiet end and taken by and large, prices held their own although buyers were at pains to obscure their reviving intei’est.

Kempthornc, Prosser “ rights ” gave ground under the impetus of a fresh wave of selling but no quantities are available and one good buyer could absorb all available and send the market in the opposite direction. The price deterioration has been entirely affected by minor business in tiny parcels and neither buyers nor sellers lose much because of 'the shilling discrepancy between last week’s price and this week’s. Interest in Clias. Begg' and Company shares quickened during the week and buyers advanced their offers in sixpenny rises to 34s 3d — a 2s rise on the week. No seller of the “ old ” shares ventured out though a seller of the new issue shares “ baited ” buyers at 35s on a couple of occasions. No better illustration of the measured caution of the market could be found than its reaction to the latest Australian increase in the price of copper. Mount Lyells and Morgans, the two most prominent producers, did not budge following the announcement which a couple of months earlier would have had an electrical effect on share values. The increase is £lO a lon and brings the maximum fixed price to Australian producers to £l4O a ton. Last year Mount Lyell achieved a net result which justified a resumpiton of dividends and this in spite of the fact that for a portion of the year they received £IOO a ton of copper produced, and £l3O for Ihe balance of the year. On the new basis of £l4O a ton, dividend prospects seem assured and whereas buyers were paying up to 35s at the end of last year on speculative possibilities of.< a continuity of dividends. the shares look very cheap buying to-day at, say, 31s 6d on far more assured prospects. Mount Morgan digs an average of almost 200 tons of copper a month and is consequently in line for an additional income of, say, £20.000 a year, which in itself is equivalent to better than 2d a' share on the ordinaries.

The Dunedin City Council, which for six months or more has been accepting “ pencillings ’’ for its 1948 loans, advised applicants last month that firm applications would then be accepted for a 3 per cent, issue maturing in 20 years. The circular went on to say that the ' pencilled amounts were greatly in excess of loan requirements and with a dash of salesmanship, concluded. “but will be allotted to applicants in order of priority of applications.”

All who queued up were accommodated bv a grateful city treasurer, bin those who were a little tardy or were more knowledgeable of current loan values can get another half-crown per cent. now. providing their knowledge of present-day values does not still further deter them. No doubt the three and one-eighth issue will be readily placed, but the council has leaned heavily on its reputation to conclude such astute financing.

The junior chain store group, Macduffs, Ltd., issued its tenth annual report during the week for the year ended December 31 last. Expansion has gone on apace in the 12 months which have intervened since the last report was issued. Some aspects of this development have already been recounted here, and in particular those dealing with the purchase of a controlling interest in Tekau Knitwear and the internal formation of Macduff's Holding Company. This latter is actually landlord to the retail business, but more than that is also to an extent wholesaler to it, a practice which is assuming considerable proportions in Australia where the tendency is for either the manufacturer or the retailer, if the size of the organisation warrants it, to eliminate the wholesalers’ share, but not to the extent of passing the saving on to the customer. For confirmation of growing public agreement that a buyers’ market is developing, if it has not already arrived, one has only to look at the company’s stock position in contrast to that of 12 months ago. Stocks on hand and in transit at balance date were £421,396 against £161,626 a year ago. The coinmany is young, but despite its tender years it has already had one almost disastrous experience of over-buying coinciding with an abrupt tightening of the public pocket, and although the retail trade is still buoyant shareholders might question the wisdom of the company building up selling problems for itself. The share registers will be closed against transfers on Wednesday next for the. purpose of determining entitlement under the scheme to subdivide the present £1 shares into 5s units. , .. Fletcher Holdings will close then transfer books on the following day to prepare the circulars and forms relative to the issue of additional shares in the proportion of one new for every three held. The market for the shares has wilted during the week and sales were made at the close at 35s in contrast to 36s 9d at the beginning of the drug house of Sharland and Co. is also seeking new capital, and shareholders are to be asked to subscribe for 375.000 new shares at a lai*epremium of 15s. and will be offered the new shares in the proportion of three for every 10 held. The share register will close on March 19 and the letteis conveying the offer will be posted on April 9.