BANK SHARES WEAK

Wanganui Chronicle, Volume 83, Issue 29, 4 February 1939, Page 15

BANK SHARES WEAK

LOWEST FOR FOUR YEARS

DOMINION ISSUES SUFFER. THREAT OF INTERFERENCE. With prices at the lowest point for at least four years, the weakness of banking shares is one of the most noticeable features on New Zealand Stock Exchanges at present. Even with a background of generally depressed levels, the present low values stand out, and the poor support for a class of investment which is usually sought for long-term holding is a striking example of the lack of confidence among operators.

While Australian issues have suffered setbacks during the past year, the main brunt of the withdrawal ot support has been suffered by the two Dominion institutions. New Zealands at 38s 4d and Nationals of New Zer/-’ land at 47s are at the lowest points recorded for a considerable number of years. Nationals have rallied slightly from the even lower value of 46s 3d touched a week ago. Although the recent position of the Reserve Bank’s sterling balances caused some uneasiness, it is difficult to point to any other cause than the continued threat of Government interference. The concentration of investment money within New Zealand by the restrictions on capital transfers has not proved of any assistance to banking shares.

The price of leading bank shares a year ago, the lowest level touched last year and the current value on New Zealand Stock Exchanges are compared in the following table:—

Bank A’Asia 11 0 0 9 15 0 9 1 It will be seen that English, Scottish and Australians are the only issue which is higher than last year, while several Australian shares are almost on a par with the low levels touched during 1938. Taken all round, the group shows further substantial losses in the past year. In spite of slightly lower profits by several Australian institutions, dividend rates have been maintained, while record advances during the past year point to satisfactory conditions. Little has been heard lately of the proposed banking legislation in the Commonwealth, but the opinion has been expressed that nothing which may be done in this direction is likely greatly to impair the profit-earning capacity of the banks, at any rate, not sufficient to bring about a reduction in dividends. Profits of the “Big Five” English banks were lower than in 1937, which was the best year since the depression, but dividends were maintained, and, in one case, increased.

Feb. Lowest Current Bank A'flia 1938 £ s. d. 11 0 0 1938 £ 8. d. 9 15 0 Market £ s. d 9 15 Com. Aus. . 0 16 10 0 15 3 0 15 11 E.» S. & A. .540 4 16 0 1 6 ( Nat. N.Z. .. 2 14 6 2 7 6 2 7 Bank N.Z. .. 2 3 3 1. 18 < N.S.W. .. .. 32 10 0 29 10 0 30 11 Union . .. .. 9 15 0 8 5 9 8 12 6