LITTLE DEALING

Gisborne Herald, Volume LXVI, Issue 20013, 11 August 1939, Page 5

LITTLE DEALING

CONVERSION LOAN NEW ZEALAND FINANCES LONDON INTEREST FLAGS SECRET OPERATIONS HELP IN DIFFICULTY (Reed. Aug. 11, 9 a.m.) LONDON, Aug. 10. The lack of interest in the New Zealand conversion loan is unique in the history of the Stock Exchange. Apart from the markets, there is. a general disinclination to deal in the bonds. The conversion was launched 1 at a most inopportune time in the middle of the holidays. There were only four unimportant dealings yesterday. All involved only a few thousands.

It is assumed that these deals were intended to provide a basis for a market quotation, for which the public interest is nil. The market tends to (regard) tihe secrecy surrounding the extent of the conversion with academic interest in view of the unusual method 1 of guaranteeing. If, as is believed, the conversions and cash subscriptions do not cover more than a quarter of the total, the balance is well guaranteed, for which there is no question of necessitous selling. The strength of holders is- reflected in the artificial character of the opening. Abnormal Culmination Referring to the New Zealand conversion loan, the Financial Times says that the denouement was an •abnormal culmination of an exceptional transaction. “New Zealand was helped' out of a difficult situation and the official reticence over the extent of the assistance necessary casts no reflection on the merits of the stocks,” continues the Financial Times. “The terms of issue make the loan attractive to investors favouring short investments, but they are in a minority, so the new stock cannot be expected to enjoy the same free market as those of longer date. This defect might well be remedied toy the time there ar® signs of a growing realisation that -New Zealand’s programmes of social reform, must be governed by income and the effect upon the national economy. This adds to the importance of the conversion rights attaching to the new loan. The demand for it is likely to (broaden if the country shows it really has taken to heart the lessons' of the recent experiences.”