The Stock Exchange

Hawke's Bay Herald-Tribune, Issue 142, 3 July 1937, Page 15

The Stock Exchange

"Cum Pr«f" i

[ Review of Share Movements

By

A more confident tone has been ruling on New Zealand and Australian Exchanges during the past week, and pnices reacted accordingly. Sellers' limits generally were higher, ^ while recorded business showed a firming of most issues. The general recovery accompanied a firming in prices for base metals, which, however, was not maintained, although the falling-ofi was eomparatively small at the close of the week under revaew. FavoUrable Londdn Reports. Stock market reports from London indicate that recovery appears to be at hand. The Government's announcement of an increase in the exchange fund caused a blazing recovery in gold shares. Rubbers, less spectacularly, seem on the verge of another small boom. Industrials are firmer. Gilt-edged alone are weak. The failure of the London County Council issue of June 25 contrasts with the earlier loan when the council shcceeded in borrowing at the rate of 2| per cent. for 25 years. Investors appear to- be demandihg higher rates. The last few days have also seen a sharp rise in the comffiodity markets. Metals espeeially were prominent, copper and tin substantially appreciating. Owing to the over-sold cdndition of the market there was a fair amount of trade buying. Public auctions of English wool indicate a favourable outlook for the next 661163 of London salfis. Bradford huyers found prices higher than they anticipated. A number of ovetsehs topmakers who presumably had not eovered their requirements of crossbreds in the New Zealand selling season have been active. American purehases of British wool have been double last year's. Germany also have been taking more. Trend of Economic Recovery. The annual report of the Bank for International Settlements, which reviews the future of world economic recovery, states that the most ldgitimate form of further expansion will be fo-und in the revival of international trade. The report points out that five years have passed since the turning podnt in 1932. and that the duration of an upward trend for more than iive years is of rare occurrence in past business cyeles, and, has, in fact, never occurred in British experience. In many xespects, nowever, the present expansion differs from those that have preceded it. Although general, it is not international. The index of international trade is still 10 per cent." below its 1929 levei. Although tho various countries have not been unaffected by conditions elsewhere, they have . experienced recovery at clifferent times, and have stimulated it by different means. Only in 1936 did many of the raw material produeing countries feel the full benefit of the general expansion. •»The recovery is mainly domestic, and labour and capital resources remain unemployed in the export industries. Moreover, even in the domestic industries the rate of recovery has been unpreeedently slow, and, while surpluB - capacity is now largely absorbed, there has been a smaller degree of extenssontf ff plant than occurred in previous periods of expansion. At the same time, foreign investment continues at a low level, and large masses of capital are still held in liquid form, while interest rates Temain excepfeionally low. The possibility of continued expansion is, therefore, by no means to be ruled out. When stoeks of commodities are reduced to a minimum and the excess oi" productive capacity of existing plant has been fuliy utilised, there should still be a legitimate demand for long and short-term cred'it facilities for extensions. Moreover, if such extensions take place also in primary produeing countries, foreign investment may revive and with it international trade.

Associated Fetrol — Smaller Profits. Profits of the Associated Motorists Petrol Company were considerably dimmished for the year ended March 31, 1937. The directors' report reveals that "the saies of the company 'a products have shown again a substantial increase over the previous year's returns at £898,270. After providing reserve for taxation, the amount of profit available for distribution is £18.068 13/11, and it is proposed that a dividend of 10 per cent., in aeeordance with the altsred rights under the niemorandum of association, be paid to preference shareholdem and that * dividend at a similar rate be paid to ordinaiy shareholders. The balanee-sheet sliows paid capital (iucluding 25,000 ordinary shares of 20/-) at.,£lo4,407 ; sunclry creditors, £85,733; insurance reserve £1176; forfeited shares account £2161; profit and loss account £18,068. Assets include: Land and plant, £87,352; cash, £49,342; sundry debtors, £32,942; stocks, £91,847 ; shares, £62. At the fifth annual general meeting of Bhareholders on June 15, Mr. F. W. Johnston, who presided in the absence of Mr. Charles Todd, chairman of directors, said that the continued expansion of saies was shown as follows : 1934, £464,832; 1935, £628,698; 1936, 1577 4,001 ; 1937, £898,271. The chairman said the company 's profits this year were not correspondingly increased, but on the contrary considerably diminished. This was due to Beveral caiises, but principally to substantial mcreases in overseas costs of products, lieavy increases in tanker freight rates, and, within New Zealand, to increased taxation and operating costs.

Increased costs were forecast at the last annual meeting, but it was not anticipated that the extra costs would be so great, and the ld per gallon incieasQ in prico during the year had ben insufficient to restore the profit to last year's level. Uhfoithnately, ovex-seas >-osts aiul freighfs are still rising. The company' s linances were mainfciuued in » sound couditieM. Totul

sets were £261,546 9/5, an increase of £8468 11/9, as compared with last year, and liquid assets at £174,131 18/1 were £2331 8/- higher. The profit and account showed that of total saies £898,270 14/8, an amount of £460,524 10/7 was disbursed by way of taxes and duties. The net profit for the year was shown at £18,068 18/11, which, after deduction of net profit from lubricating oi! and kerosene trading, represented a profit of .3784 pence per gallon on motor spirit. To give an illustration of what happened to the company's revenue the chairman stated that he had had a chart prepared- showing what became of each £l received by the company. This showed that only 5/2J in the £1 was remitted overseas, the remainder circulating within the Dominion. Taxation accoufited fdr 10/3, New Zealand goods and seivices 4/1^, and profits 5d. N.Z. Farmers* Fcrtiliser. 4 The dividend recommended by the Directors of the New Zealand Farmers5 Fertiliser Company Ltd. for the year ended May 31 is six per cent. The net profit for the year was £21,160, which is the highest since 1930. The shares in this company changed hands at T3/four years ago and to-day's prices are 21/-. The trading results since 1930 have been as follow:...

The following table gives the highest and lowest prices and in brackets the number of parcels which changed hands on New Zealand "Stock Exchanges during the past week: — GOVT. STOCES AND BONDS.— Inscribed Stock, 31 p.o. 1938-52 (2) 102 15 0 Inscribed Stock, 31 p.c. 1939-52 (1) 102 15 0 InScribed Stock, 31 p.c. 1953-57 (1) 100 0 0 Inscribed stock 4 per 1943-46 (3) 104 0 0 Inscribed stook, 4 per 1MB-49 (4) 104 0 0 103 17 6 Insoribed stock,. 4 per 1952-55 (3) 103 10 0 103 0 0 Rural Bonds, 5 p.c. 1947 (2) 102 5 0 102 2 6

Net DlviProfit. dend. Reserves, p.c. 1930 30,976 8 24,463 1931 4,649 — 37,656 1932 16,785 5 40,342 1933 13,281 6 40,524 1934 17,718 5 45,142 1935 18,836 5* 49,569 193/ 19,374 5* 54,533 1937 21,J60 6 59,874

Com. of Aust (pref) (I) 9 2 0 Com. of Aust (ord) (19) 18 9 18 3 Nat. of Aust £5 pd (5) 7 5 0 7 2 9 New South Walea (4) 35 7 6 35 2 6 New Zealand (ord) (26) 2 5 3 2 4 0 N.Z. (d. mort) (4) 16 6 16 3 Union of Aust. (4) 10 17 6 10 15 0

BANKS—

National (5) 17 6 17 8 New Zealand (3) 8 6 0 3 5 6 Queensland (1) 2 18 6 South British (10) 4 16 0 4 15 0 Standard (2) 2 19 0

INSURANCES—

GoldBbrough Mort. (1) 1 15 8 Guarantee Corp. (3) ... 6 0 Traders Finance (1) ... 2 0 3

LOAN AND AGENCY—

N.Z. Kefrig (£1) (6) 19 1 IS 10 N.Z. Refrig (10) (10) 6 10 8 9

FROZEN MEAT—

Auckland (1) 113 Christchurch (1) ......... 17 6

GAS—

Huddart Parker (1) ..„ 1 18 7 Devonport Ferry (3) ... 10 3 10 0

SHIPPING.—

Kaitangata (1) 12 0 Taupiri (3) .......... 16 6 Westport (2) 13 6 Weatport Stockton (4) 16 3 16 0

COAL—

Kaiapoi (17/- pd) (9) 13 8 IS 6 Wellington (pref) (1) ... 6 0 0

WOOLLENS—

Dominion (5) 2 8_ 6 2 3 3 New Zealand (5) 2 10 3 2 7 6 Staples ...., 2 11 3 2 10 7 Tooths (1) 2 15 8 N.Z. (rights) (25) ....... 1 3 3 1 1 3

BREWERIES—

Anth Hord. (pref) (5) 19 8 19 0 Aust. Glass (5) 4 12 0 4 10 9 Aust. Iron and Steel (pref) (8) 16 5 16 3 British Tobacco (10) ... 2 10 0 2 9 3 Broken Hill Prop. (45) 4 1 4 3 18 1 B.H.P. contr. (4) ... 3 16 8 3 12 9 G. J. Cole's (33) .... 5 3 8 5 1 6 Colonial Sugar (5) ... 47 0 0 46 17 6 C. Brick and Pipe (1) 7 9 Dominion. Fert. ^1) 13 6 Dunlop Perdriau (14) ... 12 6 12 3 Elec. Zinc. (22) 2 17 2 2 14 G Elec. Zinc (pref) (1) 2 18 11 2 15 6 Eleo Zino (B. pref) (1) 12 3 Farmers' Trading (5) 111 110 Hume Pipe (Aust) (7) 19 2 19 0 Bycrofts (1) 2 2 0

MISCELLANEOUS—

(13) 4 0 0 8 18 9 Mort Dock (1) 13 9 Taranaki Oil (3) 4 4 4 • 2 General Industries" (2) 1 0 8 19 11 Henry Jones Co-op (1) 2 7 9 Howard Smith (3) 1 1 6 118

McKenzies Dept. Stores

Drug) (4) 3 14 3 ~ N.Z. Farm Fert. (5) ... 110 10 6 N.Z. Newspapers (1) ... 16 0 Wilson's Cement (20) ... 2 1 Ox 19 0 WoolwortliB (N.Z.) (rights) (2) 4 11 0 4 10 0 Woolworths (Syd) (26) 7 0 A fi ift n

Kempth. Prosser (N.Z.

Waihi Investment (5) ... 11 10 11 8 Martha (1) 15 4 Mt. Morgan (46) 18 1% 12 8 Mt. Lyell (81) 2 2 6 2 1 1 Big River (4) 1 6§ 16 Broken Hill South (37) 2 9 8 2 7 6 Broken Hill North (3) 3 12 9 3 11 9

MINING—