WELLINGTON NEWS

Hokitika Guardian, 7 October 1929, Page 2

WELLINGTON NEWS

FALL IN SECURITIES. (Special Correspondent.) 1 ■ ... >;,v- WELLINGTON, Oct. 4. • When money becomes dear, that is nrwhen one has to pay more' for credit the first 16 be affected by the changed u .conditions are what are known as 'Stock Exchange securities, that is stocks and shares bonds, debentures, «dptc. These securities' are ' extremely sensitive, and move up <or down in response to the movements ‘-in money Glrates and they are very prompt to re- ' ;Uispond. On the London and New York '-iStock exchanges and -the Bourses in Paris, Berlin and other Continental •Unities'''all such securities' are immedi- > ately marked down, and the movement ‘'(extends to all other parts of the world ■ '"'.for there are many Stock Exchange •'securities that are international or in-:t,ter-Empire. As an example most of the banks in Australia and New Zealand have their shares quoted in London as well as in Australia and N.Z. and when, owing to the advances in money rates : prices fall in London there is at once a repercussion; ;jn the Dominion. During the past week or so shares, that is bank shares, have declined markedly. Tins does not mean that there is anything wrong, with the banks, on the "contrary, one can make certain they will pay the usual dividend and that their profits will be as large as in the ’past year, or perhaps larger because they will now able to employ all .the funds they may have available at a profitable rate of interest. What is happening is that investors in shares. now want a bigger return, and those who hold the shares find that if they wish to sell them they ■ < ■ j n.’jiust accept less than was the ca#te a week or two- ago. Market views have changed with the change in the bank : -ate. The drop on The value of sharps , 's not to be regretted; because'-.thpy ! -.vere carried too ;high' through'investors' ./ .-ompeting : against -themselves, and the "eturn or income from : the Shares -half been absurdly small. lOf course ,busjr less on the Stock: Exchange, lull, and the dullness'.will he most act ; •entuated in those rceiitres where dealngs have been angulad.phenomenon that investors who how considerable, speculative courage . when business is brisk bepome as tiiriid " ,J -s mice when there is the least; pi’os-' pect of dullness. .IwV,-'' When Stock Exchange'securities 'aiip, ’epressed one can be sure that most, ther securities will be depressed and that commodity prices will fall. One 'market affects another and although, hey appear not to have any connection they meet on cqmmon ground when money becomes dear. We may tliere.’ore expect-'to* experiencef dullness, which will he relieved to a • light extent by the activity in the export trade. Several company promoters have been preparing to exploit 'he investing public during the next "ew months but these concerns must f . iow call a. halt. It would be foolish of'any small investor to take up shar'os in any new concern, and it would ; • be better.jto wait until things simmer •'•down. ' ; At present there are not many con-. cerns seeking the support of the: puh- - V*Dc. The prospectus of the Australian ’ nnd N.Z. . Bank has been before the public Fo’rsome time and apparently the shares arednot being -taken up as quickly as the promoters anticipated. The prospectus of the London and N.-Z. 'i. Bank for, which the promoters obtained rur :fcvfv charter fro mi our Parliament, has ojff-ia dot yet made its public appearance i bobiyid it is obvious that those who. in--02 noi4feted that another bank was wanted iff' the Dominion have bad cause-to >2 their’views. . ~ S The country is well ifurnished with banks and their resources are ample to meet the legitimate demands of '• the community. The banks have not as yet altered their lending rates, but ‘ ' They many be forced to do that later by the conditions ruling in Australia. Investors are likely to be asked to subscribe for whaling ventures, and here again caution is necessary for their enterprise is overdone. Aceord- , . ing to. a foreign correspondent of “The .I. Times”, 8400 men have been engaged b . in Norway for whaling in the Antarc- ' tic. The; slaughter of the whales this' " season is likely to 'be appalling and ” the authorities impose necessary restriction the stock will be great'lv reduced and the whale stands a . ’... chance of being exterminated. This is not the time for speculation and even investments need to be carefully 'scrutinised. It is a time for saving, cy,, for economy, for the exercise of prudqnce and caution. Conditions will ■ . ...not remain as they are, there must be ~m adjustments downward and when these are effected trade and commerce will 'begin to hum again.