SHARE MARKET.

Star (Christchurch), Volume LXVI, Issue 20480, 5 December 1934, Page 9

SHARE MARKET.

Money Matters and Trade in Review. The past year,” said Mr E. Bucholz, chairman, at the annual meeting of the Wellington Stock Exchange, “ has shown a greater volume of business in financial and industrial shares, which may be taken as an indication of returning confidence among investors. Although still faced with many problems as yet unsolved it appears that we are well on the road to a more settled state of affairs and that the greater assurance displayed is justified. “ Of course, the lower interest rates which now apply, including the reduced bank rate, have been reflected in the market price of all shares of merit, which have advanced substantially in price. We can see no prospect of an increase in prevailing interest rates and investors must accept, on company shares of established security, a rate as low as or lower than the rates for trustee investments, but in many cases improved dividends and bonuses in cash or shares will sweeten the return, a fact which investors must not overlook. It is for this reason that today much inquiry is being made for sound industrial stocks. “ With regard to trade generally,” Mr Bucholz remarked later in his address, 44 there is every indication that the steady improvement noticeable during the past year will be maintained. Spectacular rises in commodities are not likely to take place, nor are they desirable, as they always bring a reaction. Nations are beginning to realise that international trade is a necessity for all, and when this is once more established it will go a long way towards creating that confidence and trust among nations that is so lacking all over the world to-day.” The Government has indicated that important provisions are to be brought down early in the New Year to deal with mortgages and providing for the issue of mortgage bonds by a mortgage corporation, Mr Bucholz explain--1 ed. “Until these provisions are announced and the constitution of the corporation is known criticism would be futile, and uncalled for. Careful consideration should be given' later, however, to the proposals and the effect they are likely to have on land values. Interest also attaches to the amount of private enterprise, if any, which will be permitted to enter into the construction of the mortgage corporation and to what extent the corporation will be authorised to deal with mortgages other than those at present i held by the State. i “It will be undesirable to exclude private enterprise. The bonds will, if the terms of issue and the conditions are reasonable, serve to absorb some of the money to-day available for firstciass mortgages at the current low rates of interest. Provided the establishment of the corporation results in the removal of restrictions now suffered by lenders who can recover neither interest nor principal and that the values of second and third-class lands are adequately written down, more healthy conditions of the mortgage field of investment will be brought about.” In August last, said Mr Bucholz, the Reserve Bank of New Zealand, the capital of which was largely over-sub-scribed, started to function, and the shares of the bank have apparently become a popular investment, having regard to the premium of about 30s

now being paid for the shares " The effect: this convern will have on our long-established trading banks is being keenly watched," he COmtlnlledi “These banks have \vell and truly served the public, some almost since the {ounclatiun'of the colony (now the Dominion), and this will not bear Contradiction There are probably many of us who were quite saxtisfied with the 01d regime, ~ " The Government’s action in appoint‘ ing a Royal Commission to inquire} into company promotion, etc., is to be‘ highly commended. and I am sure that the findings and recommendations of the Connnission. more especially those regarding Stock Exchange matters, will have the support and approval of members, and redound to the benefit of the public. “ The suggested establishment of a corporate investment bureau should flirther protect the investing public by carefully examining prospectuses before being published." ’