WELLINGTON NEWS

Hokitika Guardian, 7 February 1929, Page 3

WELLINGTON NEWS

COMPANY PROMOTIONS. [Special To The Guardian.] WELLINGTON, February 4. Many persons basing their opinions on tho hanking returns and the exports and imports have emphasised the obvious fact that there is comparative ly speaking, an abundance of capital in the Dominion for investment. For some time past investors have shown a preference for stocks, bonds, debentures and shares, or what are generally known as Stock Exchange securities. And the small investor has joined up in the game. The result olf this new investment has been to bring out quite a number of promotions before the investing public. At no time in the pasi ten years have there been so many public appeals for capital and fortunately for the public most of the ventures appear at a first glance to be reasonable propositions, some more so than others. There are two hotel propositions, the Titivangi Hotel in the Auckland district, but the prospectus of this con cern has not yet been issued, hut the promoters have been in such a hurry, or they were afraid that all the invest ment money for that kind of venture would he mopped up, that they fell obliged to advise the public that the venture will be before it shortly. Then there is another hotel venture in Wellington. The company is known as the Grand Central Buildings, Ltd. and the idea is to build a new and elaborate hotel on the site of the present Albert Hotel at the junction o>" Willis, Manners and Boulcott Streets It is explained that the Company is not interested in conducting the hotel the lease of which already has been arranged at £l5O per week, but in tin construction and ownership of tin buildings, which will include several shops. This company is issuing £40.000 of second mortgage debentures hearing interest at 7-J per cent. The first mortgage is held by the long term branch of the Bank of New Zealand. That well-known theatrical combina tion “Fullers” is offering first mon gage debenture for £300,000 at 6£ per cent, the security being the many theatrical properties of the firm. A good many people prefer debentures to shares because of the fact that there is a definite return and the security is more assured for the debentures are a prior charge over the assets.

There are several concerns inviting the public to subscribe for shares. A promotion that has been a long time before the public is the New Zealand Tobacco Coy., and canvassers have been very busy hawking the shares. Wellington Tea Rooms, Ltd., appears to have been brought under the notice cf a selected few. probably because the investor who subscribes for shares wil* have to submit to some rigid and unusual conditions. Those tea rooms are to be located in the new Majestic Theatre in Willis Street, now nearing completion. Then there is an advertising stunt known as Neron signs hut there an no details of this, merely a bare an nouncement that a company is to he formed. Then there is that mysteri ous new hank the “ Australian and New Zealand Banking Corporation, Ltd.,” which has been registered ir. Sydney, where the head office is to r located. The capital of this concern is £5,000,000 in £1 shares, but as yet no public issue of shares has been made. It was reported some time ago tlnr canvassing for shares was being made in Christchurch. In addition to all this there is the London and New Zealand Bank, the formation of which was sanctioned by Parliament last session and the right of note issue accorded r

But it will be some time before shares in the concern will be issued. At the moment investors have a fairly wide choice of good things, but nevertheless care will he necessary in making a selection. The mortgage do bentures are a good sound investment, provided there is ample margin o 1 cover. This of course can be easily ascertained and the two now on offci appear to be quite good. A greamany people prefer debentures because the interest rate is fixed and interest is payable ifrom the start. XVith share one has to wait until the concern is established, and the preliminary ex ponses, goodwill,i patent right and other paper assets are wiped out be fore dividends’ can be of any size. None of the companies offering shares seem to think that much im porta nee is to he attached to the calibre of the directors, and yet the success or otherwise of a company depends largely upon the directors. Ull loss they are men of ability and integrity, and the class of men who are regarded 111 the community as sound business men, it is best to avoid taking up shares. It would be a mistake to swallow at a gulp all the optimisti ■ and flowery statements -that nmy be made by the share-pusher. The latter is not concerned about the Ifuture <>! the company, his sole interest lies in selling shares and pocketing the commission. Before buying shares a good rule to follow is to consult a recognised sharebroker and member of tho Stock Exchange.