SHARE PRICES

Evening Star, Issue 23382, 27 September 1939, Page 6

SHARE PRICES

PROSPECTS DURING WAR AN AUSTRALIAN REVIEW EFFECTS OF RISING INTEREST RATES With a three-year war in expectation, and with the experience of 191418 to refer to, something of the future of Australian share prices can bo foreseen. First of all, there has been an immediate rise in pastoral shares, because of the announcement that a deal for British purchase of the whole clip will be promptly made. The previous war had been a long time in progress before arrangements of similar intention were initiated: and it was expected that there would bo much delay in disposing of the clip, and realising the returns from it. Now, the woolgrowers are being lifted over that period of suspense. The total Australian credit from the wool clip and the carry-over will bo estimated more closely when the price per lb is declared, and it is decided whether Australia will receive a share of probable profit from British resales. Shipping shares advance, and will advance; though we may pray that ships will not be made valuable by a havoc so great as that of the German submarine war in the last struggle. In total, during the World War. Britain 105t_7;76 million tons of merchant shipping; more than one-third of the 21 million tons which she and the dominions began with ; and losses were 3.7 million tons in the one year. 1917. War-time replacements of 4.8 million tons partiv made up the loss. This war opens with nearlv 21 million of shipping for Britain and tlm dominions and Gormanv has onlv 4.5 millions. What will ho the extent and intensity of war losses in shipping ean”e+ he guessed beforehand, but the deduces ore better nrenared. ; Australia’s industrial metals were ; n a bad position in 19U. German or Gorman-controlled works were the eh’ef customers for eonner and vino, "ntl deliveries were held "P. Nothing ’’ke the existing Australian industry ’’•on and steel had then come into being. INVFSTMENT STOCKS. Many of the largest share issues in Australian trade and manufacture, with their long-continned stability, are in investment stocks yielding a fixed income. Their prices in the market must be expected to recede if or as the rates of interest go higher. The market value of ordinary or “ equity ” shares will also be influenced by a rise in interest rates, though in such lesser degree ns wartime spending increases net earnings available for distribution to ordinary shareholders. Extremely active manufacture, with consequent spending upon retail trade ; n all directions, may ho ’expected from the war. if its destruction does not come within Australia’s land boundaries. This will, however, be ■accompanied bv heavier general taxation (income and sales), and by still more vigilant restraint of war profits; all of which are subtractions from the impetus to he given by war. The theory of war economics is that they .should divert national spending to war needs, and away from luxuries, which latter are therefore heavily taxed, or rigidly rationed, and their importation may be prohibited. Banking shares can be expected to arrive at their prices almost purely in accordance with the rates of interest from Government stocks, and proportionately to the present standing of each hank in the share market. The most favoured of them are just now asked to give from \ to 3 per cent, higher than the leading Commonwealth securities.—‘ Jobson’s Investment Digest.’

MINES AND METALS REPORTS AND RETURNS Moonlight. Moonlight Goldfields reports that the wash-up on the claim on September 23 was 813 ounces for 400 hours’ sluicing. New River Dredge. The return from New River Gold Dredging Company Ltd for the week ended September 21 was 17oz for 97 hours from 9,300 yards ot old workings. Mossy Creek Dividend. The Mossy Creek Gold Dredging Company lias declared a dividend. No. 13. of one penny a share, payable on October 12. FOREIGN EXCHANGES Press Association—By Telegraph—Copyright LONDON, September 26. (Received September 27, at 1.30 p.ra.) New York, dollar to £1 ... 4.02 to 4 Pans, franc to £1 1763 Montreal, dollar to £1 ... 4.43 to 4.47 Amsterdam, florins to £1 ... 7.47 to 7.57 Switzerland, franc to £1 ... 17.55 to 17.85 Stockholm, kroner to £1 ... 16.70 to 16.9 C Athens, drachmae to £1 ... 540 Lisbon, escudo’ to £1 1103 Kobe, pence to yen Hongkong, pence to dollar 15 Shanghai, pence to dollar 3J to 4 1 Brussels, belgas to £1 ... 23.60 Home, lira to £1 783 Tokio, pence to yen ... ... 14