STOCKS AND SHARES

Wanganui Chronicle, Volume 82, Issue 288, 6 December 1938, Page 11

STOCKS AND SHARES

INVESTORS SHOW NERVOUSNESS SHARE LEVELS FALL Nothing takes fright so readily a:: capital, and successive waves of nervousness culminated in a serious setback to values on the Auckland Stock Exchange this week, states Saturday’s Auckland Herald. Business, whiexi previously had been moderately active dwindled to a meagre flow and prices dropped in all sections upon a general contraction of buying support. Business normally diminishes toward the holiday season, but the present movement has set .in too early to be attributed to that cause. Uncertainly overseas and increased doubts about the domestic position have created an atmosphere of nervousness and it will take a great deal of reassurance to overcome it. Financial circles have waited in vain for a statement from either the Prime Minister or the Minister of Finance dealing ‘with the facts of the situation. It is felt that some recognition by the Government that, in view of the deterioration of the trade position it would be unwise to maintain the same legislative pace would not only relieve the tension, but would tend to rally forces to the support of the State. In the meantime investors are seeking safety for their funds, in accordance with their interpretation ot the situation. Rise in Security Yields Outstanding in a weak and nervous market is the depreciation of Government loans. Competent observers consider that these are unduly depressed and that holders are sacrificing their securities. Mr. Savage has frequently stated that New Zealand’s first consideration always will be to pay her debts,, but, in spite of this, yields from Government loans are showing a materially higher return than those from local body debentures, which in normal times are regarded as the lesser security.

In comparison with Commonwealth securities, New Zealand loans afford an interesting contrast. Prior to the advent of the Labour Government in the Dominion, New Zealand fixed interest stocks provided a lower yield than those of Australia, whereas today the Commonwealth is raising a new loan at £3 17s 6d per cent., about 10s per cent, lower than the average current yield on New Zealand stocks. Following is a comparison of the levels ruling a year ago for a selected number of Government loans, compared with those of last week;— Dec. Dec.

A further fall in Bank of New Zealand and National Bank of New Zealand shares reflected the general uneasiness. Turnover in Bank of New Zealands was fairly substantial, in view of the lightness of other trading, and closing business was done at 40s 9d, the lowest point of the year, in spite of the fact that they carry Is a share dividend, payable next week. Insurances were lowei’ and other New Zealand classified issues were weak on light trading.

The Australian market lacked encouragement throughout the week The Commonwealth has suffered to some extent from over-importation, and drought in Victoria has seriously affected the outlook. These influences have caused a general sag in the values of all Australian securities, the weakness of which has served to intensify the uneasy feelings in the Dominion market. The leading counters were all dealt in at weaker levels, but the market was steadier at the close of the period. Taranaki Oils attracted attention by a sudden mid-week fall, but, after touching 9s, they were immediately lifted to 12s following publication of the company’s drilling report, which discounted rumours current in the market. Business in mining shares was almost negligible. Gold issues provided the bulk of the turnover. Metal prices fell during the week and these issues were easier on the levels.

3, 3, 1937. 193S. Bonds, 15/2/43-46, 4 1021* 98.1* Stock, 15/3/39-43, ■ 31 101M 97t Ditto, 15/1/53-57, 34 981 9314 Ditto, 15/4/46-49, 4 1025 984 Ditto, 15/6/52-55, 4 105t 98a “Buyers. ♦Sellers. New Zealand Banks Weaken