NEW ZEALAND LOAN.

Hokitika Guardian, 23 August 1921, Page 4

NEW ZEALAND LOAN.

NOTES AND COMMENTS. LONDON, July 6. 1 At the time of writing it is really ‘ too early to sav how the New Zealand K loan, which has been floated to-day, is > being taken up, but one of the leading t London stockbrokers lias just informed 1: me that it lias been exceedingly well j received. Indeed, ho lias not heard a .. single word of adverse comment, and this could not be said in regard to some 1 other recent loans. He anticipates 1 there will be no difficulty in obtaining > the full subscription. | 1 “New Zealand lias not been to Lon- ( don for a loan for about eight years | (says the “Financial Times”), so nobody lias anything to say against the forthcoming issue to-day of U 0,000,000 of six per cent stock, February and August, 1930-51, which is being offered 1 at 90. Underwriting was going on ' i yesterday, and they said in the House c that it was finished before the close, j ] Nowadays a lot of underwriting goes , ( outside the Stock Exchange altogether. The commission is If per cent. The effect of the new-comer was to lay a 1 slightly restraining hand upon the buoyancy which had distinguished the market earlier in the day.” < Statements made in the prospectus show that the ordinary revenue and expenditure account of tiie Dominion has exhibited a surplus in each year 1 during the war, the accumulation at : March 31st last amounting to £23,730,OOO;]. Of this Cl ,200,000 has boon used ] to increase to oveu £2,000,000 the giltedged securities held under the Reserve Fund Securities Act. The greater portion of the remainder has been, or is being used for the settlement of discharged soldiers on the land, and for financial assistance in the purchase of stock and the erection of buildings'. These investments are interest-bearing. Of the entire debt of the colony, L 51,730,000 is directly interest-hearing, and is represented by assets the present value of which is stated to he much greater than the amount of the borrowed mne.v spent upon them. Out of the proceeds of the loan now being raised C 3,000,000 will go to meet contracts placed in the United Kingdom for the supply of rolling stock and material required for railway extensions, and for other public works. This in itself, the ‘"Financial Times” characterises as a recommendation, another being the fact that the stock will constitute a trustee investment. The flat yield is Of per cent. This is greater than can he obtained on other New Zealand Go- , vernnieiit securities, which have always been steadily absorbed and well held. Assuming the stock now offered runs for its full period of 30 years, the yield, allowing for redemption, will he L'O 5s 10(1 per cent, hut il the Government exercises its option to repay 15 years hence, the' holder will .have received CO Ss Oil per cent. With deposit rates reduced to I per cent, the loan affords to the investor an excellent opportunity of utilising profitably his free balances. NEW ZEALAND’S WAR FINANCE. After noting that the recent Auckland loan was over-subscribed, “The Times” continents: “The operation represents new borrowing, but as the New Zealand Government has abstained from borrowing in this market lor nearly eight years, the stock should meet with a good response. A quarter of a century ago New Zealand stock stood at a price below that of New South Wales stock, but that position has since been ivveised. New Zealand Fours,’ 1912-02 are quoted at 09. None of the existing New Zealand stocks gives a yield as high as filial obtainable on the stock now ottered. Approximately £3,1X10,000 oi the proceeds of the loan will be applied to the payment of contracts placed in ths country for rolling stock and other railway material, for electric power plant, and lor equipment of other public works. The New Zealand ordinary Budget showed a surplus during the war amounting to nearly 23;[ millions, the larger proportion ol which Inis been invested in stock an dbuildings for the settlement of ex-soldiers on the land. The European war debt of New Zealand amounted to over HO millions, ol which nearly 53;j millions were raised in the Dominion. The proportion ol the debt, exclusive of the Euprnpcau war debt, which is interest-producing, is 70 per cent. New Zealand has a larger proportion of her people settled on the land than any other country.” The “Daily Mail” describes the prospectus as being more informative than such documents usually are.