NEW ZEALAND STOCKS.

Manawatu Standard, Volume LVIII, Issue 44, 20 January 1938, Page 8

NEW ZEALAND STOCKS.

Tiik week-end commercial and financial news from • London is always of great interest as showing world trends. Last week-end ihe London Stock Exchange had its usual fortnightly settlement, this being the first for the New Year. It may be pointed out here that on the London Stock Exchange, stocks and shares are not paid for immediately following a deal; more often the transactions are not settled for until the account day; in the meanwhile the shares or stocks may change hands several times. This system is peculiar to the London Stock Exchange, and it is an indication of the' very high business morality of the brokers and jobbers. We are told that giltedged issues remain firm, though the prospect of new borrowing is tending to, reduce activity. The British Government must borrow for rearmament, and the amount may be £100,00b,000 or more, in which case there would be more gilt-edged issues available to investors; that is, there would be an increase in the supply, and there is therefore no urgency'in buying. We are also told in the cabled report that New Zealand issues are the weak spot among Dominion loans. This is rather surprising, and it would be very interesting to know the cause. The Minister of Finance may have inquiries made to ascertain the cause. If there were all round weakness in Dominion stocks we could understand it, for it would be a general market movement, but why New Zealand stocks should be weak and others unaffected calls for explanation. New Zealand has always paid interest on the due date and has asked for no concessions; and there are funds in London to meet whatever obligations may be due, for the Reserve. Bank holds over £16,000,000 in sterling ex:changebesides over £2,800,000 in gold. The cabled quotations on January 5 for New Zealand stocks were for the 41 per cents £lO5 Ts 6d, a rise of 7s Gd on the previous week, the price of the 31 per cents, due 1940, was £lOl 10s, a rise of 6s 3d, and the 3 per cents maturing in 1945, at £9B 10s, a rise of ss. A week later, that is on January 12, the 4-1 per cents were quoted at £lO3 7s 6d, a drop of 30s on the week, the 31 per cents fell by 12s 6d to £IOO 17s Gd, and the 3 per cents were lower by £1 15s at £96 15s. If these recessions are due to interest having been paid we would have been told so, but that does not happen to be the case and therefore the decline must be due to some other cause or causes not known in New Zealand. We have just completed nine months of the fiscal year, and it may be that London investors have obtained information relating to the preliminary figures which appear not to be quite satisfactory to investors. It is quite possible that investors are taking an unwarranted view of the situation.