FLIGHT OF MONEY TO AUSTRALIA

Timaru Herald, Volume CXLII, Issue 20481, 28 July 1936, Page 7

FLIGHT OF MONEY TO AUSTRALIA

DAILY INCREASE REPORTED

SYDNEY NEWSPAPER REVELATION

“DUE TO NERVOUSNESS IN NEW ZEALAND”

Onlted Press Association—By Electric Telegraph—Copyrigh t (Received July 21, 5.5 p.m.) SYDNEY, July 27.

“The Daily Telegraph” says: “The flow of New Zealand money for investment in Australian securities, which has increased greatly in the last six weeks, has been largely responsible for big advances in the leading industrial stocks. The influx can be traced to nervousness in New Zealand, due to the accession of the Labour Government, and the legislation enacted by that body. The new taxation proposals directed against large incomes may accentuate the present uneasiness.

When Mr Savage first became Prime Minister, money was attracted to the Dominion by his assertion that he would restore the New Zealand pound to parity with sterling by stages. When this was found Impracticable, however, the funds so attracted were quickly repatriated. Normally there is an intermittent Inquiry on New Zealand account for the issues of Australian Banks, Colonial Sugar and other stocks with New Zealand affiliates, but this has now developed into an everyday demand. With a limited field available for investments of the type sought on New Zealand account, prices for the highest class industrials, and even for fixed interest—bearing Australian securities have risen. The downward trend in prices in Australian consolidated stocks has been checked and such stocks as Glass and Broken Hill Proprietary have advanced to the highest levels on record. On the other hand, Bank of New Zealand ordinary shares, on which a 10 per cent dividend has been consistently paid, have fallen from 49/- to 41/-, purely because of New Zealand selling. Fixed deposits throughout the Commonwealth have increased by £3,154,169 in the last quarter, but it is understood that only a relatively small pr<» portion of the increase represents Ne// Zealand money.