The Guardian AND EVENING STAR, With which is incorporated ” The West Coast Times,” FRIDAY, MAY 27th., 1921.

Hokitika Guardian, 27 May 1921, Page 2

The Guardian AND EVENING STAR, With which is incorporated ” The West Coast Times,” FRIDAY, MAY 27th., 1921.

THE FINANCIAL OUTLOOK. An improved demand for investment stocks and shares has been apparent during recent weeks, says the “Dominion." Buyers have been more numerous and prices of Government stocks and bonds have shown a silght' advance. The prevailing opinion in commercial circles, however, is that the movement of* the market ought not to be interpreted too optimistically. The evidences of financial depression are still very strong, and a substantial improvement in the outlook for New Zealand’s staple exports is required to make the situation easier. “The rise in the pi ice of Government stocks appears to be, due to the fact that a certain, amount of money is available for investment among people who are indisposed to invest in any industrial eoncerp oi to make purchases of land until there is some indication of the resumption of normal conditions,” said the chairman of the Hank of New Zealand, (Mr Harold Beauchamp). “In the meantime theso people are finding a most profitable investment in Government stocks, especially those which are free of inpaying 41 per cent, interest free of income tax, at th o rates that have been ruling lately. Some of these stocks, come tax. wcrp at one time down as low as £77, and at this rate laiily large purchases were made. At that ‘ time there was not a very big supply of the debentures, and as the demand continued they naturally commenced to <fo onwards, with the result that the price to-day is £Bl 10s to £B2. If, howover, many sellers canio on the market, | have no doubt there would be an immediate recession in the value. Another factor was pointed out by the stockbrokers. The Government stocks and 1 Hinds declined in price during March owing to fairly extensive sales hy persons and forms who required to improve their hank balances before th c end of the quarter. Money was difficult to obtain then, as it is now, and some of the realisations were more or less forced. Sales were, made here and there at prices below the values recorded in the stock exchange lists. Thip movement naturally depressed tho market ,and in the opinion of brokers the rise in prices that lias taken place within the last few weeks may he regarded in part as a recovery due to the removal of an abnormal influence. The movement is illustrated by the case of the New Zealand Government Inscribed Stock, 1039, which was quoted on the Stock Exchange at £BB 10s, (buyers) on January 15 last, £Bl. (sellers), on March 81, £7B (hujw) on April 23, and £S2 (bnyort) on May Ifl. Tho fin* jipciol sltua.ioh generally In ’Wellington'

is very dull. There is a strong demand for money, but the quantity available is small. Investors are being offered some attractive opportunities, but they are showing a disposition to take a conservative view of prospects. Generally speaking, they will not lend money oil mortgage, even at 7 per cent, without a very wide margin on a valuation well below the level of recent years. A good deal of the money that normally would have be made available for the use of the producing and manufacturing industries is being invested in Government stocks, which at the reduced price's give a very good return with a reasonable assurance against depreciation. The demands of the trading community are increasing the difficulties of the money market as far as the farmers are concerned, and comparatively little land is changing hands at the present time. Agents state that alert buyers in possession of cash hav e been able to secure some bargains in farm land lately, but it appears that most of the farmers, even those whose financial difficulties are serious, are sitling tight and hoping Jor better times. The high price of money and the insitenoe upon liberal margins have eliminated the merely speculative buyer to a very large extent. Financial circles are watching developments in the wool market with very keen interest, since very much depends upon the ability of the farmers to sell their wool. The improvement recorded at receni sales of free and B.A.W.R.A. wool has had a cheering effect, but it is recognised that the prices are still too low to give ground for sanguine expectations. “We realise that the farmer is in for a bad year, and that we must all suffer with him,” said one commercial man, “but we will all la 1 cheered up if we see. that the farmer isl going to get enough to keep him going. You can say that at present we are in a.state of suspense.”