The Stock Exchange

Hawke's Bay Herald-Tribune, Issue 190, 28 August 1937, Page 12

The Stock Exchange

"Cum :

Pref"

Review of Share Movements

B* 1 V

The effect of the clash between China and Japan, while disturbing business on the London Stock Exchange, has had little effect on the New Zealand and Australian stoelc markets during the past week. While. the repercussions in England ' were a sliarp . contraction of business and a sag in , prices for most ehares, the New Zealand markets have operated freely with firm" prices for most issues. Speeulation is rif® as to the effect of the eastern war. on wool prices during the coming season. The opinion has been expressed that Japan will continne to buy large supplies of wool for military equipment, but there is also to be considered the possible Testriction of purchases which have HTiherto been manufactured ' and exported. Any restrietion in the wool buying on behalf of Japan is likely to be reflected in a downward tre'nd in prices during .the coming season, and the profits of loan and agency firms may react accordingly. Higher Interest Rates In spite of the efforts of the Government to keep interest rates at lower levels^ there liae been a tendency fox rates, for loans in particular, to karden. There has been very little borrowing at the rate of 3£ per cent. ruling for local body loans, becamse lenders consider this rate too low under present conditions. It is stated that higher rates will have to be offered by local authorities to attract funds and with the neeessity of considerable borrowing for local body. major schemes in the near future, it is anticipated that the rate of 3£ per cent. fixed for loans of this type several .years ago. mav prove to be merely nominal. LocaLbody stoeks have changed hands recently at prices which return £3 17/6 and £4 per* £100 to the buyers. and these prices indicate the return which .investors are anticipating. Australian Banks Neglected. With Lhe two polilieal i'aetions in . Auslraiia using the Irading * banks as, part' oi' the political prbpaganda, the bupport for theso shures has aimost enlirely disappcared. The only issues traded during thc past week have becu Uommercial of Auwtraiia ordinaries at Ihe lovvest recordod price of the year of 17/9. Australias i'ailed to attract buyers at £12 3/-. Unions were passed. at £10 2/-, although saies were reuordcl up to £11 2/6 less than three months . ago. National of Australia were Qlfer--. ed at £14 17/6, but there were no buyers' quotations. Bank of New Zealands continued in demand and after trading from 44/6 j to 44/10 during the previous period xemained iirm at the latcr price. Buyers offered 44/6 for additional supplies at ciGsinir saies with seilers' demands at 45/-. Some isolated . dealing in insurance shares saw Nationals a shade fifmer at 1S/2 and 18/3 and niore were sought at 18/1, but no supplies were available. N'ew Zealands failed to attract buyers at 64/6 after selling up to 65/3 during the previous period. Tw.o parcels of boutk British changed hands at 100/and 100/6 and further buyers' offers at 98/6 met with no respon'se. Standards and Queensland were unquoted on the Wellington Exchange, and a midweek quotation of the foriner on the Aucklnd Exchange at 59/6 iound no buyers. Loan and Mercantile. A limited tui-nover was recorded in shares in the loan and mercantile section. Goldsborough Morts closed iirmer at 35/11 after selling up to 35/9 during the previous period. Guarantee Corporation were traded at 4/11 and 5/-, closing at the latter price. New Zealand Loan and Mercantile were offered at £42, but buyers valued the issue at £35, and no business was recorded. The directors auticipate a proht for the year ended June 30 last of about £190., 000. before charging British income tax, but after paying the national defence contribution for three months from April 1. The estimate is gLven in the directors' eircular setting out tlie proposals for capital reorganisation, which has arrived by air mail. The net profit for 1935-36 was £88,262 and for 1934-35 £17,044. Assuming that all the profit is distributable, it would Ieave, on the basis of the proposed altered capitalisation, after paying oue vear's debenture interest and one

year's interest on the 5 per cent. preference stock, a surplus of £72,000 available for dividend on the new ordinary stock, equal to about 5| per cent. In the explanation to skareholders it was stated that conditions have completely changed since 1927, when tho 6£ per cefit. preference stock was issued. Although the company had always maintained an extremely liquid position, the balance sheet showing cash balances in excess of £475,000 and first-class investments of over £450,000, the greater part of its cash was necessarily kept in New Zealaud and Australia, and owing to the dis* eount on the eurrency of those countries, could now be remitted to London only at a heavy loss. As a result of the rise in commodity and produce prices, prospects had greatly improved, but the board estimated that even under the more favourable operating conditions prevailing it would be leven years at the very least before all arrears of preference dividend could be paid off and the ordinary stockholders brought within sight of a modest recompense. ■Wright Stephenson and Co., Ltd., report a net profit of £42,815 for the year ended June 30 last. The sum of £37,144 brought forward makes £79,959 available. The directors recommend that, after the fixed payment on preference shares^ a final dividend of 3 per cent. skould be paid on ordinary shares, making 5 per cent. for the year, against a distribution at the rate of per cent. per annum, for the previous

15 months. The dividends require £27,504, leaving £52,455 to be carried forward, : The' chairman's report stated that the past year had been one of rising prices' for farm produce; which meant larger ' commisteions "and better earnings for the company. Costs, 'however, had been .rising, both for 'farmers and the company. The increase in costs would ereate a serious position if prices of farm ' produce . wero to drop. farmor exchanged- his products for goods and ■ services he Tequired, and if the cost of those .got oiut of step with the price level of his products his position became difficult. The company 's figures over the past twelve years -have been as follow!—

G. J. Coles Record Profit Substantial increases in both saies and proiits are reported by the directors of G. J. Coles and Co. Ltd. for the year ended June 30. Net profit was £223,460, compared with £154,851 the previous year. The ordinary dividend has been raised from 12£ per cent. to 18| per cent. (3/9 a share), the total distribution, including the 8 per cent. preference charge of £12,000, requiring "£183,224. The directors recoriimend a tfansfer of £40,000 to general reserve. . Directors' salaries and fees are shown in the profit and loss account at £15,989. Paid-up capital was increased during the year by the issue of 14,580 ordinary shares to employees at 60/- a share, ancl by a further issue of 163,070 ordinary .shares at 40/- cacli to ordinary skareholders on a one for five. basis. Premiums from the issue arno unted to £192,230. Last rnouth the directors anuounced a bonus issue to ordiuary skareholders of one new fully-paid ordinary share for every 10 ordinary shares lield on July 31. Ten new stores were opencd in tlie year, and seven rites were acquired upon which the directors expect to have storcs erecteu before the en'd of this year. A ware^duse of 'two fiqoxt' is ifr proeess of erec-.-tion of the site purchased at Pyrmont (N.S.W.) Preehold properties" increfised during the year by £54,980. The following table gives the, higkest and lowest prices, and, in brackets, the number of parcels which changed hands on New Zealand Stock Exchanges during the past week: -

Net Dividends profit. per cent. Reserves. £ ord. pref. £ 1925 45,134 7 5i 101,828 1926 26,562 7 5i 106,413 1930 36,035 7 54 112,484 1931 20 512 6 54 102,031 1934 41,354 3 6 41,74'2 1935 40,320 4 5 57,561 *1936 40,220 5f 6£ 65,277 1937 42,815 5 54 72,872 * 15 months.

Highest. Lowest. £ s. d.' £ s. d. GOVT. STOCKS ' AND BONDS— inscribed Stock 31 p.c.-1939-43 (2) 103 0 0 Inscribed Stock, 81 p.c. 1939-52 (1) 103 I7 6 - Inscribed Stock, 31 p.c. 1953-57 (1) 98 15 0 Inscribed Stock, 4 p.c. 1943-46 (77 - 103 0 0 Inscribed Stock, 4 p.c. 1946-49 (2) 105 5 0 105 2 6 Inscribed Stock, 4 p.c. 1952-55 (3) 105 5 0 105 2 6 BANKS— Com. of Ans. pref. (1) 9 6 0 Com. of Aus. ord. (15) 18 2 17 9 New Zealand ord. (14) 2 5 0 2 4 10 New Zealand d. mort. (3) 19 9 1 9 * INSURANCES— National (2) 18 3 18 2 New Zealand (5) 8 4 0 South British (2) 5 0 6 5 0 0 Standard (11) 2 18 0 LOAN AND AGENCY— Goldsbrough Mort. (4) 1 15 11 1 16 6 N.Z. Farmers' Co-op. 44 p.c. Stock 1940 (2) 4 10 0 Guarantee Corp. (8) 6 1 4 11 FROZEN MEAT— Gear Meat (1) 19 6 N.Z. Refrigerating (10) (4) 9 6 GASAuckland pref. (4) ... 15 1 lfi 0 Auckland ord. (5) 117 116 Christchurch (1) 19 0 Wellington (1) 1 16 0 SHIPPING— Huddart Parker (2) ... 2 3 0 2 2 5 Northern Steam (1) ... 8 11 COALWestport Stockton Pref. (3) 4 0 4 7 Sestport Stockton ord. (1) 2 6 TIMBER— Kauri (1) 12 6 National (1) 9 9 Taupo-Totara ord. (1) 70 WOOLLENS— Kaiapoi (2) 14 6 " Manawatu Knitting (I) 1 15 0 . Wellington ^pref (2) ... 5 18 0 5 17 6 BREWERIES— Carlton (1) 3 6 0 Dominion ord. (5) 2 2 9 2 0 3 Dominion pref. (8) ... 1 14 6 1 14 1 New Zealand (5) 2 10 0 2 9 9 Staples (1) 2 12 9 Tooths (2) 2 15 3 2 15 0 MISCELLANEOUS— Aust. Glass (10) 4 16 6 4 15 G Britikh Tobacco (5) ... 2 11 3 Broken Hill Prop. (42) 4 4 6 4 8 6 Claude Neon Lights Sydney (1) 2 12 8 G. J. Coles '20) 4 19 0 4 17 3 Colonial Sugar (8) ... 48 15 0 47 17 6 Consol. Brick and Pipe (2) 8 5 8 4 Dominion Fertilizer ord. (3) 15 0 14 9 Dominion Fertilizer pref. (1) 1 18 li Dunlop Perdriau (4) 13 9 13 3 Elec. Zmc. -10* 0 1 2 19 4 Elec. Zinc. pref. (8) ... 0 b 2 i9 0 1 Farmer*' Trading (8) 1 0 10 10 9.

Hume Pipe Aust. (16) 112 1 0 11 Radio (1930) Ltd. (3) 14 0 13 6 Taranaki Oil (20) 5 2 5 0* Shillings Ltd. (7) 19 3 18 9 Kempthorne Prosser (N.Z. Drug) (7) ... 3 15 0 3 14 3 Milburn Lime (1) 2 3 6 N.Z. Farm Fertilizer (9) 110 1 0 10 National Tobacco (2) -.. 3 4 0 N.Z. Paper Mills (1) 16 9 Wilsons Cement (15) ... 1 2 10 12 0 Woolworths (N.Z.) (2) 5 3 0 5 2 0 Woolwortlis (N.Z.) rights (4) 4 3 0 4 1 0 Woolworths (N.Z.) 1st. pref. (1) 2 0 3 Woolworths (Syd.) (22) 6 13 0 6 9 6 Woolworths (Syd.) 2nd. pref. (3) ;. 18 0 South Africa (12) 16 11 16 8 McKenzie's (7) 4 7 6 4 6 9 MINING— Mount Morgan (19) ... 11 8 11 2 Mount Lyell (34) 2 4 4 2 3 0 Broken Hill South (21) 2 10 0 2 8 3 Broken Hill North (2) 3 18 3 3 18 0