NEW STOCK SALEABLE.

Wairarapa Age, 15 March 1933, Page 4

NEW STOCK SALEABLE.

GOOD MARKET VALUES. CONVERSION’S ADVANTAGES. (Contributed.) The fact that bonds or stock in the Government loans concerned in th« conversion scheme are saleable on the stock exchanges is not fully grasped by small holders, many of whom are perturbed at the extension of the period of the loans under the new issue. A holder of some 5J per cent, securities which are due to mature in 1936 sought information from his broker who told him there was no need to worry. “You will be able to realise on the market at any time,” the broker said, “and possibly at a better price than you paid for them.” Still the holder was unconvinced. So the broker said, “Do you want to sell them nowf Lean set you £9B for every £100.” <Vs that true?” the man said, “You mean I can get my money out at any timet” “Yes, at the current market price, which should improve. Your stock is as good as gold and moreover, when you convert you will receive an extra tl 2s 5d for every £lOO worth of bonds m the original issue. This premium is granted because in reducing interest from 5} to 4 per cent, vou suffer more than 20 per cent, reduction. So that for £5OO worth of bonds vou will receive £505 worth of new stock and the odd money, 12s Id, in cash. This offsets to some extent the loss of £7 10s a year due to the reduction in interest, and your capital is permanently increased by £5. There is also every indication that the price will steadily rise above par. Australian conversion stocks did so, and there is no reason why New Zealand stocks should not go even higher." The holder thought awhile. 44 We11," he said at last, "I think the best thing to do is to convert the bonds. I’m in no hurry to get my money, but I want ed to know if- the conversion stocks would be safe."