Confidence Restored In Leading Investments

Otago Daily Times, Issue 26916, 30 October 1948, Page 3

Confidence Restored In Leading Investments

INVESTMENT MARKET

By Gregory

Complete con fidence in current market levels has been re-estab-lished on the Stoc ilc Exchange and for the third week running the tenor and tone of busin rss has demonstrated that investors are quite prepared to accord a full measure of support to leading investment scrip at or near the present prices. This is the more creditable considering the factors already ar rayed or expected which will absorb surplus investment cash. Reid Rubb tr (New Zealand) is to place a large 5 per cent, cumulative preference issue on the market next month, G. J. Coles and Company are cab ling the full payment and premium for their new issue in February, A.C ,1. notices are on the way, Mount Morgan has made its major call, and tl ie Morts Dook payment is due next month. Price gains were both more numerous and substantial than they have been in three months and the rate of price acceleration, usually a clue to market keenness, set a )?ace to which the market has been unaccustomed this year.

Felt and Textiles 'Of New Zealand ordinary shares made the best gain of the week when they mi.<ved from 43s to 45s Cd as an immediate reliction to relaxed overseas selling. New 2 saland Breweries were similarly freed fro m absentee pressure and moved from 51 t; 3d to 52s 6d in the period with buyer i strongly assembled. In each case botto pi was pin-pointed in these notes last we ek, and the clearance of a substantial pa feel of the Felts midweek when the recc very had already commenced paved the way for the shares to quickly assume a 1 more realistic value. It is not unlikely. that the Australian parent company hns been liquidating a large block of s’, lares to provide the wherewithal to tak 6 up the 155,000 Korma Textiles ordinary s Lares for which it has contracted. It will be recalled that the company unloaded a subs tantial parcel of the shares last Octobe r in order to buy into the Korma Comp: iny, but on that occasion an unusual marketing method was employed to affect a one-day clearance. If it Ls correct tci assume that a repetition has just take at place the advantages of the earlier method are immediately apparent, particula fly as a considerably larger operation was involved; but for market interest It is worthwhile recalling the assurance giv >en by the parent company at that tit pe that it "intends to retain as a perm; ment investment a controlling interest in Felt and Textiles of New Zealand, Li Jnited.” Kaitangata Coa l shares enjoyed an unaccustomed pop ularity all week and warmed to the attention as readily as any spinster of similar years belatedly selected for a let a static role. Last weeks

record figure of 42s was progressively lifted in daily stages to 435, the market closing yesterc'lay at 42s 6d (buyer) and 44s 6d (seller). I Although the shares were active througl iout the entire period the major busines s was written on Wednesday when 850 ; of a total of 1150 for the week changed from investors' hands to speculators. When the purchase price of Westport Coah Company was announced in June of la: it year we recorded in this column that " Kaitanfeata Coal shares were lifted to a ne « high of 26s by the Westport sale.’’ :in the intervening months optimism ha * vied with pessimism—“highs” of 3ils were followed by ‘lows of 31s and ’ porse still, complete buyer apathy, whic h at limes made sales impossible. The capital paid up is exceedingly moderate at £50,964 and if one excludes the 1295 forfeited shares unissued the current mark ot price of 43s asks a cheque for a fraction over £150,000 from the State. Share opei ;ators are not unaware that the company'has recently been liquidating ■ its own shape investments and the fact that transfers from the company’s n fi Tl ? have been floating around suggests that its reserves and liquid assets are excluded from, the negotiations and will therefore eventually represent a further dividend to shareholders. We also commented 15 months ag p “ the company s days are assuredly r (umbered,” but to-day the observation < jould be confidently amended to " the cc inpany's hours are numbered. Bank sh ires took a new lease of life to • coincid i with the commencement of the delibe rations of the P riv y_pouncu on the B fink Act litigation. The fact that Priv>< Councillor Peter Fraser was not callecl to the Supreme Bench of British Ju ttice to adjudicate on the case of Social! $m v. Free People cannot be accredited 5 «is 3 il bull * factor, but tiie market w; is confident that the High Court judgment . would be endorsed. All six nudges o f the High Court held that Section 2 6 of the Banking Act (which provides for the taking over of puvate banks by the Commonwealth Bank) was invalid a nd the six were also unanimous in invali dating Section 17-20 which provides foi: the replacement of the bank directors bv Commonwealth nominees, to give a fflli'p to hopes, the Bank of New South Wales announced a quarterly dividend at the rate of 8 per cent to establish a new record for bank dividends in the post-wai i period. The I Count Lyell Company reports a sharply .decreased tonnage for the year ended' September 30. The ore treated amount';d to 1.319,429 tons in comparison with a throughput of nearly 1,500,000 tons last ye ar. Copper production was consequently 1700 tons lower, whilst silvei and gol d recoveries were down 63000 z and 150007 respectively. Dividend prospects, or rather the prospects of a reasonable divider ,d, are accordingly diminished, but the m nrket which keeps a month-to-month tally on production figures remained unchanged with a wide quotation.