NOTHING ABNORMAL

Wairarapa Age, 29 July 1936, Page 2

NOTHING ABNORMAL

OUTFLOW OF NEW ZEALAND MONEY. NO NOTICEABLE SELLING PRESSURE. FACTORS TO BE CONSIDERED. CHRISTCHURCH, July 28. The contention that the comment cabled from Sydney yesterday, alleging that the flow of money from New Zealand had contributed largely towards higher market prices of Australian industrial stocks was not altogether fair, was made in a. statement by the president of the Stock Exchange Association of New Zealand, Mr. H. Kitson, this morning. Not more than 10 per cent, of New Zealand money at present being invested in Australian securities, he contends, could be attributed to the nervousness of the Labour Government’s financial policy. “It must be remembered,” said Mr. Kitson, 1 < that May, June, and July are months which in the ordinary course of events are most active for investors. They have by then passed March with its taxation obligations and these three months .provide the time when any idle funds come into the investment market.” Dealing with the suggestion of a strong swing by New Zealand investors towards Australian securities, Mr. Kitson said that those who sought to place money in industrial enterprises had always tended towards Australian shares no matter what Government was in power. New Zealand was not a big manufacturing country and it was perfectly normal for. the investor to look towards Australian industrial 'companies for the investment of some of his funds. “Except for a few New Zealand stocks, he continued, “there has been no noticeable selling pressure at all in recent months. The delay—ind I suppose it is necessary delay—in presentation of the Budget has given the opponents of Labour a chance to put ridiculous rumours round the country. There is always a certain amount of nervousness which greets any disurbance of any kind anywhere, and it is unfair to shoulder the Government with responsibility for any outflow of money from the country. Factors to be considered in an estimate of the present position are that there has been a great improvemeht in the economic condition of Australia in the last few years, an improvement in dividend by well-established and well-managed industrial firms which has made investments attractive, and, speaking gene- 1 rally, I hold that not more than 10 per cent, of the New Zealand moneys being invested in Australian securities is due to nervousness by the people of New Zealand on account of the oresent Government. Another factor to be considered,” he said, “is that during the last five years many wild-cat schemes have been floated in New Zealand in which investors have lost their money and people are now looking for well-established companies in which to place their surplus funds. Any new flotation where there is a good chance of profitable trading is met by New Zealand investors with a readv Response.”—(P.A.)