Review of Share Movements

Hawke's Bay Herald-Tribune, Issue 1, 16 January 1937, Page 15

Review of Share Movements

"Cum Reef"

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*AU Right* Reserved.J Ti iiiM>ttnro«i«rr

After tlie holidays New Zealand Stock Exckanges opened last Tliursday week with prices genera%- eaBier tkan those ruling at tke close of last year. Tke lower rates followed a period of uncertainty on tlxe London and Australian exchanges which began operations some days previously, Witk an easing in tke tonsion in Europe, however, tkere was a marked recovery and it soon becaine evident that an abundance of buying orders kad been keld temporarily in abeyance. Tke demand, with one or two exceptions, again has been for popular issues, among wkick Australian skares kave called for most attention. Witk tke increased , demand pricea began to firm and some substantial gains kave been reeorded. Tkere can be little doubt tkat tkere is a preponderanee of buying orders and tke volume of business kas been eteadily increasing-. Inquiries for Government loans have been limited, but prices kave been maintained at tke elosing r,ates of last year. It is to be expected, kowever, tkat tke general trend of prosperity wkick accompanies higker prices for primary produce will result in money being directed into ordinary skares ratker tkan Government securities. A furtker fall in prices for Government loans and fixed interest bearing stoCks can be anticipated, particularly as tke dividends of ordinary shares increase, tkereby establishing generally kigker interest rates. banking issues populab. Witk tke announcementa of kigker dividends, it is reasonable tkat bank skares skould attract attention and tke turnover in tkis section reacted accordingly. Australian banking issues called for tke bulk of tke business and tkere was evidence Of firmer prices. Tke Oommercial Bank of Australia reeorded gains to seli from 19/3 up to 19/6, elosing at tke latter priee. Kumours are current of tke possibilitiea of Australian banks seeking new capital and tke name of tke Oommercial Bank of Australia is being linked witk tke rumour. Tke skares kave been recommended by most of tke Australian brokers for some ,time past, but prices over a period kave remained fairly steady from 19/- to 19/9. Bank 'of New South Walea opened firmer at £35 10/- after selling at £34 10/- bef ore tko kolidiays. In spite of tke announcement of a kigker dividend rate, Union Banks were a few skillings easier to trade from £10 5/- to £10 6/-. Tke kigker dividend, kowever, kad been anticipated by tke rise in December last. Tke skares in tkese two banks must be regarded as two of tke ssafest investments. Tke prosepects for steady capital appreciation and kigker dividends are good, and wkile tkey may not be as spectacular as tkose of tke industrials, tkis in itseif is indicative. of tke conservative and staple policy of tkese institutions. Tke two Kew Zealand banking issues failed to register recoveries, National Bank of New Zealand' did not ckange kands, altkougk tke skares were quoted witk sellers asking 63/6 to buyers' offers of 61/6. Bank of New Zealand opened firmer at 41/6, but tke price was not maintained and elosing saies were easier at 41/- and 41/3. Olosing saies last year, kowever, were reeorded down to 39/6 and 40/-. Tke possibilities of future Government action affecting tkese two issues leave room for doubt in investors' minds and tke skares are negleeted accoraingly. Tkere can be little doubt tkat tke banks are making hight prollts in spite of tke Eeserve Bank limiting tkeir operations, but witk tke recent outspoken remarks of tke Minister of Finance, tke Hon. W. Nask, at London it is apparent that tko New Zealand trading banks continue to attract Government attention. Buyers of tkese securities are apparently adopting a long terin view with tke knowledge tkat changes in Government cause changes in policy. It kas been rumoured, however, that tke Government, which already kas large interests in the Bank of New Zealand, proposes to take over this institution. Wkile tke rumour has no official backing, it is possible tkat «uch action may be contemplated. LOAN AND AGENCY SSAEES Tke maintenanee of high wool prices must of necessity be reflected in tke current accounts . of tke WOolbroking companies. In this conneetion we may expect a substantial increase in tke turnover of tkese firms. To some exten0, ^owever tkese additional profits will be offset by increased wages and taxation. Nevertheless, the maintenanee of high wool prices will contribute to kigker profits, and it is to be expected that a reeurrence of tke high share prices of tkese issues will oceur early this year, as tkey did early in 1934, following a particularly good season. In Australia tke settlement of the trade dispute witk Japan and tke return of the Japanese woolbuyers to tke market has kad tke effect of forteifcig ijpj prices, and Dalgety's and Goldsbrough Mort. skares kave already firmed. The former kad business up to £11 152/6, after elosing at £10 12/66 bef ore the holidays. Goldsbrough Morts sold up to 28/-, a rise of 2/11 on last year's prices. insueance shaees in demand The insurance section shared in the general activity of the markets and prices were generally firmer. Eecently published balance sheets reveal that the companies are underwriting more business, wkile tke investment holdings of all companies must be definitely showing better returns. Nationals changed hands a share firmer at 18/3. . South British, which is always a popular issue, advanced with steady business to 94/10. This company has treated investorS remarkably well in tke past and there appears to be every reason to expect a eontinuance of good returns from tkese shares. New Zealand Insurance opened firmer at 61/9, but business was limited to two saies, sellers apparently requiring higher prices at 62/6 tkan buyers were prepared to pay.

new zealand beeweeies eise In the brewery section tke substantial rise of New Zealand Breweries to 60/6 resulted in tke recording oi the kighest price since before tke depression. Tke turnover in tkese skares was greater than for any corresponding period since tke general election. It is rumoured tkat tke company proposes to absorb yet anotker New Zealand brewery, but it seems tkat tke kigk prices were due to a great extent to tke phenomenal Ckristmas trade. The rise in tke price for tke skares vjks overdue, and attention was drawn to tkeir pi'ospects on more tkan pne occasion in tkese colutnns last year. Tke popularity of Dominion Breweries continues althougk tke price appears to kavea settled for tke time being at approximately 40/-. The progress made by tkis company during the past two years kas been exceptional, but it Will perkaps be as well for those who contemplate purckasing this issue to remember that it is a costly business to compete with a combine Witk tke financial resources and extensive activities of New Zealand Breweries Ltd. chain stoees eecoed gains During 1936 it was ilnpossible to review share markets without ' ref erring to tke trading and prices Of chain store skares, and tke present year kas opehed witk yet anotker record trading in tkese skares. Activity began witk a steady demand and a rise in price for G. J. Goles wkick opened at 90/- (last year's elosing price) and advanced to 99/6. Tke skares in tkis company kave advanced on seVeral occaSions in anticipation of some additional benefits, but tke repeated disappointment of sharekolders kas caused periodical reduetions. Tke advan.ee. in tke skares, kowever, was followed by a keener demand for Woolwortks (Sydny) issue, which firmed on business from £8 1/3 to £8 16/-, elosing at £8 14/- and £8 15/-. The respective subsidiary companies of tke parent cOmpany also reeorded gains and "Woolworths (N.Z.) advanced witk keen demand to £7 13/6.