New Share Price Index For N.Z.

Press, Volume C, Issue 29497, 26 April 1961, Page 19

New Share Price Index For N.Z.

The monthly index of share prices in New Zealand compiled by the Department of Statistics has been revised to' exclude companies which do not trade in New Zealand. The new index is based on 1960 prices and has been widened in scope to cover three main groups, subdivided into 14 sub-groups. The main groups are industrial, distribution, and finance.

The new index has been linked to the old serie* to enable comparisons to be made with previous years. "A special feature of the New Zealand Stock Exchanges is the considerable volume of trading in shares of overseas domiciled comoan ies, particularly Australian." says the department.

“While some of these companies may be affected to some extent by conditions in New Zealand through the trading here of their branches or subsidiaries, others with no interests in this country are quite unaffected by conditions here," the department says. Selection of Shares

“Clearly the representation of the latter class of companies in the index would mean that it would fail to reflect economic conditions in this country, and such companies have not been given representation. “On the other hand, if the scope of the index were so

narrowed as to reflect only economic conditions in this country by including only those New Zealand domiciled concerns which trade only in New Zealand or are

engaged in the marketing of this country’s exports. Some economic activities Could be given only very limited representation, if any. “This is because of the dominance in some fields of concerns either with overseas interests and/or an overseas domicile: Compromise “It was, therefore, necessary to compromise and to represent not only companies which trade only in this country but also concerns with overseas interests if they had significant trading interests in this country, either directly or through subsidiaries.”