FACTS FOR INVESTORS.

Auckland Star, Volume LIX, Issue 230, 28 September 1928, Page 4

FACTS FOR INVESTORS.

TREND OF THE MARKET. LNsIRAiSCE SHAP.Ki, Attent.on was drawn in these columns l;wt 'a .ek to t:ie very general advance which has taken pia.-e in bank shares du: me tie- past twelve months. 'I nc nv:\t < .a.-v'iticatmn in order in the wfek.y ."nii'Hi .son t il>!e published herewith di-.iii wu,i insuiancc > om-pauies, and he: e a_ r i:n it wiil I> ( ' noted that the tendency > mi hi_ r he; ptice-i and a lowei rate ot interest, llius. Wttii tne exception ot tie' National, which, at to-day's mai ket pi ice. would retuin £4 lti/10 per c.;nt on present in all the ehaies quote<l oiler to investors is from 3'% to 4 per cent. 1 ui- is a rate lower even than su'di lovfctments as war ioans and municipal dolK ni m es.

1 ile special uttractious r, ;u~:ir.ince snares to investois a? el - First, tile ;in-

donote 1 security ot tie' institutions which have subst.inti i. iwrrv«*. that place them in an ahno>t invuinen.bie position financially. secondly, a marked teixlenf.-y to increase the rate of div idend, and last and most important the practice yvlrieh has Income almost a. iiabit oi returning the sharehoMers every fey. - yea is some of the surplus protits in tito snape ot bonu6 shares.

Thus the investor in a £1 share to-day-ma.v only (ret 4 per cent interest, but if at end <« the year the company gives a 3/ bonus on each share, his interest is automatically raised to 5 per cent. So the proce*»< on. and as is well-known in many cases. original shareholders have turned their money over many times. In recent years tire bonus habit has l>een so reamlar with the chief insurance companies that these seeking .-diaies have to mortgare the iutnre several y ears ahead, ill the hope of securing a profitable return ior their outlay. Ihe iuture is something no one can tell, and with tire' losse* making heavy inroads into profits thore ie no savins when, in any particular case, the next "onus wi'l come along. This much, hoivevet. mav be emphasised, namely, that must of the companies are in a position to pay their normal dividends out or investments. tho returns from which ate secure and riot likely to markedly depreciate. The market price of National shares is not quoted in the table. Twelve months a.go it stood at 13 17.'' for the £o share, but in the meantime the par value of the shares has been lowered to £1.