WELLINGTON NEWS

Hokitika Guardian, 16 May 1930, Page 2

WELLINGTON NEWS

STOCK EXCHANGE BUSINESS.'-

(Special Correspondent.!

WELLINGTON, May 13

There is no doubt that on the Dominion Stock Exchange business lias been good, and iri. a great many cases values have betfn held up.' New Zealand investors by their, operations have maintained the prices but in Australia leading sharebrokers consider hat low prices must j prevail for some time as there is, a great shortage of .money for investment and it can be very little different in New Zealand Tor the reus-' on that the spine causes are operating herfe to bring.about a shortage of investment funds. The national income derived from the sale overseas of our primary products is much less was six months ago for the exports for the half-year ended March 31 show a shrinkage of over £7,030,000. _ Investors do not consider the position from this .point of view but go upon the theory will right itself. . This is very comforting but it is not practical. Recovery must come about some tjme for no country can experience dull times for ever, but on the theory ’of investors recovery is to com*, about at-' once, None of those who hold those Views ■ can give any sound reason for their 1 belief. The wish is father to the thought, but shrinkage will not brine 'about the desired end. . Thq dullness of to-day with its concomitant of unemployment is due to the decline i nproduce values. If there is to be recovery then produce must advanpe to a profitable level, or if they fail tp do so costs must bp out so that a profit may accure on present prices. So far wo seem to be holding, on in The hope of produce prices, rising, and the temporary advance butter lulled us into false security. t - Competent authorities cling to. the belief that prices will remain low for a considerable time mainly on the ground that world purchasing power is now veiy restricted. The season of 192930 has been one of low prices, and if next season fails ,to show ally improvement in. values what.will be our position? We have as yet done notlijqg in the way of adjustment and if, present state of' affairs, continues uneniployment must continue; Another, season -of low prices would be disastrous and probably such an experience is necessary to. bring us all to a realisation of the imperative needs of the times. The unemployment problem during the next 3 or 4 months will be intensified, and the Government or rather the taxpayers must shoulder the burden. HpwevfH*, ,tbe Australian view that share values will go lower can be supported by - evidence available at the moment. Some shares have 'falleii this year to some extent. Bank shares are the favourites arid they may' be taken as an index. Commercial Bank oi Australia sold in January on the resumption of business after the Xmas holidays nt 25 s 3d, last week they changed hands at 19s 9d; Bank ] of N.S.W. shares have delincd -‘"fiAlri’ £4l 5s to £3B 10s: Union Bank 1 hfive gone down from £l2 to £ll 5’s 1 :’ Commercial Bank of Sydney from £23 15s teo £2O; English, Scottish and Australian Bank from £6 18s to £6 4s, and Australian Bank of Commerce from £26 10s to £23 9s. This cannot be very pleasing to those who bought such shares in January. The same opinion now held obtained then, that the shares would come hack instead of which they have gone back. But Bank shares have not been the only one to decline, for others show similar movements. Thus Dalegety and Co. have fallen from £l2 6s 6d to £ll 3s 6d. Tooth’s Brewery from 41s to 32s 3d-, Staples and Co. from 55s 3d to 48s, British Tobacco Coy from 44s 3d to 36s 6d, Electrolytic Zinc from 32s to 23s 3d : Mount. Lyell from 36s lOd to 26s lOd. New Zealand Farmers’ Fertilizer from 22s to 18s 6d :

Dunlop Purdrian Rubber from 21s 6d

to 14s 6d. and so on, but it must be » said that the purely New Zealand companies do not show such movements. Thus it will be seen that investors and brokers have not made a success of their offorts at forecasting, and theforecasts are still, in the same direction but it is to be hoped that the results will be different. When real efforts are made overcome the slump and less reliance placed on Government interference and help, trade, commerce and everything else will improve, and improvment means earning profit which is riot the case just now.