AUSTRALIAN SHARES

Evening Post, Volume CXXI, Issue 4, 6 January 1936, Page 10

AUSTRALIAN SHARES

SECURITIES REVIEWED

GOLDMINE PROSPECTS

(Special to tho "Evohlng Post.")

MELBOURNE, December 30.

The Exchange" closed with a fair amount of' strength in general investments,' biit' with a decided weakness and lack of interest in gold.mining. As j was pointed out in the last letter, speculation in gold'mining is assuming more reasonable and rational proportions, and the past year has been noticeable j for the decided change in the assessment and prospects of the many mines floated during the recent gold mining boom. ; . . As was inevitable in a period of frenzied speculation, the company promoter has left behind him a trail of failures but the past year has definitely proved that many of the Australian mines are capable of showing substantial returns upon the capital invested and appear suitable for investment. These are the features of the present gold-mining position, and making some forecast of the future it is certain that nextyear a large number of companies will'disappear from quotation and leave.only those of proved investment worth behind them. For gold mining then, for the coming year; we can expect a general consolidation in position, and for those mnies definitely; proved, shareholders can look, forward to a period of increasing returns. INVESTMENT MARKET. Oil the investment side, the gains throughout the year have not been so spectacular as those recorded in previous years, but nevertheless, there has been a decided improvement in individual values, and the market in general. Banking shares are only just beginning to return to favour, and it appears that the current year offers the greatest opportunity since the mid-depression. It would appear that among the list of securities, the banking group offers the safest and surest prospect of improvement and capital appreciation. In general industrials, the outlook appears to be quite favourable, but the future seems to hold a general consolidation of the position, rather than any further immediate increase in general values as distinct from individual values. Prices of the Barrier stocks rested upon a precarious basis. It was suggested that America might possibly abandon her silver policy. Shortly after the proof of this forecast was seen, when the price of silver dropped heavily through the lack of buying support of the United States. Now that China has definitely abandoned a silver monetary standard and practically demonetised the metal, by this very action, one of the declared acts of America in attempting to raise the price of silver to increase the purchasing power of the East, is dealt a deathblow. In addition, the abandonment of the N.R.A. by the United States, and the present tendency of the Government to interfere less in business, make the forecast of the price of silver a matter of difficulty, for it. is. now dependent almost solely upon American policy. SILVER AND COPPER. In any case, the results are sufficiently serious for the Barrier companies, and it has been stated that every penny rise or fall in the price of silver makes ' a difference of £6000 in the case of Zinc Corporation, £11,000 in the case of Broken Hill South, and £17,000 in the case of North Broken Hill. The statistical position of copper continues to improve, and in the latest report indicates that stocks are assuming more manageable proportions. Reviewing the gilt-edged market, it is interesting to compare the price of Government Stock with those obtaining at the same time last year. Interest rates have improved up to higher levels, and prices of Government Stock have shown a decided fall in value, and the substantial premiums have disappeared. Present opinion seems to suggest a further fall in value for the coming year as interest rates move to higher levels. Generally speaking, then, 1936 should indicate a further consolidation in the general position with the prospects of gains to certain individual issues and one or two selected groups of which the banking group seems to be outstanding.