THE INVESTMENT MARKET

Otago Daily Times, Issue 26748, 17 April 1948, Page 3

THE INVESTMENT MARKET

More Confidence Apparent NUMEROUS GAINS RECORDED \ By Gregory. A good volume of business was maintained in the current week on the Stock Exchange and this factor, taken in conjunction with a hardening trend to prices encouraged the belief that a more confident market is developing. The spate of new issue shares which has dominated trading for the past month has almost reached the end of its tether and, with the prospect of the withdrawal of this adverse influence on prices next week, the values for leading investment stocks should firm.

During the past week, overseas markets, including Australia, have plainly indicated -their confidence in a successful outcovne tp the fateful Italian elections —an event which will have far-reaching effects on international composure and which is due for decision to-morrow. According to American commentators, anything more than a 40 per cent, poll by the Communists would constitute a victory for Eastern Europe and precipitate the United Statics into taking a more forthright interest and activity in European affairs. These elections will constitute a decision round in the gigantic tug-of-war between East and West which is tulking place in the European stadium, and a result favourable to democratic government, will do much to stabilise a situation made tense by a dvli'iberate series of provocative actions and restrictions perpetrated by Russia during the past few months. Secret diplomatic arch ves record the true score in this international tussle but the best unofficial score board is the Stock Exchanges of the world which since the Communist coup in Czechoslovakia have shown a marked degree of apprehension as the boundaries of the East relentlessly expand. To-day. markets are saying that that expansion has virtually ceased due to the stiffening of Western tolerance and the rapidly changing attitude of individual governments to the foreign agents within. The weak market which has persisted since February has caused a bank-ing-up of selling orders which have to be disposed befonc any tangible gains can be expected, but, where vendor-clearances have been made, price gains are already an established fact. Both Dunlon (New Zealand), Limited, issues have hac\ good rises on the week, the preference issue in particular recording a smart advance to the 22s vicinity. New Zealand Bneweries were sought at a figure Is higher than a week ago. New Zealand Refrigerailing contributing advanced to 13s. Forest Products also made Is and quotations generally indicated that a new price level fs probably not distant. Considerable interest will be displayed in the announcement made during the week that the Government proposes to carry out location tests of the Onokaka iron sands, with a vdew to developing an iron industrv within the country. It is almost exactlv a year since a speciallyconstituted tribunal (against whose decision there could be no further appeal)

awarded heavy damages '.against the Crown in favour of private companies which had initiated a similar utilisation of the iron ore sands of certain of the North Island west coast beaches. In the seven years which have elapsed since the case against the thrown first commenced, scientific knowledge and its application to this particular problem have advanced apace and greatly favour the prospects of a successful industry being established but, nevertheless, tl.ve embryonic industry as a Socialist ventijre starts off £126,000 “in the red’’—they amount awarded against the Crown after a legal battle which for duration, complexity and monetary award, ranks high in Nyw Zealand legal history. , ’ . Debenture holders in the Onekaka Iron and Steel Company. Limited, had long since abandoned hope of recovering their original investment and the successful outcome of the protracted case, therefore, brought them “found money,” which in the initial payment amounted to 14s m the £ with a further 2s 6d promised, and good prospects of a few additional pence after the settlement of all prior claims. Heavy industries were in the newis in Australia too, with a brief cable message that a second zinc plant costing several million pounds is to be established in Australia: The Zinc Corporation is to acquire the entire 2.567,457 ordinary £1 shares in Imperial Smelting Corporation, Limited, by exchanging one of its own shares, .worth approximately £8 ss, for every five Imperial shares which are valued at about 32s Cd each. The Electrolytic Zinc Company is the sole producer of zinc in Australia to-day but it has 65,792 Imperial Smelting ordinary shares in its own investment, portfolio, and will thereby acquire a moderate interest in the concern destined to be its first rival in the field. Electrolytic Zinc shares eased slightly following the announcement but the movement can be attributed to profit-taking rather than apprehension. The capital of £4,000,000 to be invested in the enterprise by Zinc Corporation compares with £1,500.000 comprising the capital of Electrolytic Zinc but it would probably take 10 to 15 years and another £10,000,000 on current costs for the new venture to emulate the output and quality which have been achieved by the Electrolytic Zinc Company.