A Quieter Week on ’Change

Otago Daily Times, Issue 26637, 6 December 1947, Page 3

A Quieter Week on ’Change

WAITAKI FARMERS’ DIVIDEND . By Gregory A reduced volume of business was transacted on the Dunedin Stock Exchange this week, and price movements continued to be erratic, with perhaps a slight excess of losses over market gains. A hint of market uneasiness has been apparent for two or three weeks, but in this the trend has been in direct contrast with that in Australia, for instance, where the same period has witnessed a progressive movement to record heights. The more optimistic outlook prevailing in Australia appears to be fully justified on long-range prospects, and Commonwealth investors, who are well-informed on the disturbed nature of international relations, base their confidence on Australia’s potentiality for post-war greatness.

National Insurance touched their lowest point of the year when business was transacted at 24s 6d to yield better than 3 per cent, for the first time since their bonus payment in 1945. Ballins Brewery firmed again when the dividend increase and new issue prospects were announced. New Zealand Breweries continued weak on a minor turnover. In Australian metals, Mount Lyells were fractionally easier and Mount Morgan, after touching a 10-year peak of 12s 4d, attracted a preponderence of vendors and closed with sellers shading 12s. The prospectus of the Auckland Gas Company's new 4i per cent. “ perpetual ” debenture issue is due for circulation ahd a quick response is expected. The issue should be readily absorbed as it adequatelv fills a void conspicuous these days by reason of the dearth of mortgage investment. The rate offering fully conforms to the rate looked for by mortgage. investors and, in addition, applicants will acquire a security with the added attraction of being marketable or negotiable. As predicted in this column a few weeks ago Felt and Textiles of New Zealand ordinaries wilted under pressure from speculative sellers, unloading to take a Christmas box from the cheap line marketed on October 20. Those who secured parcels at 49s 5d are now released from the condition not to sell within one month and their concerted action, which throws finesse to the four winds, has naturally depressed' the market. As stated at the time, the market will as a consequence be temporarily confined, but the shares are good buying at 57s to yield better than 3J per cent, and plenty of investment rnoqey is available for “ mopping up ” at that figure. Waitaki Farmers have enjoyed one of the best if less conspicuous rises of the month and cum the recent 7s dividend, representing 7 per cent, on the £5 shares, they were traded at £5 with buyers keen to secure further quantities. Ex dividend, the sale price is equivalent to £8 13s and. at that point, the return on investment is slgihtly in excess of the 4 per cent, which, in itself, the security being arieauate, fully justifies the interest being displayed by a growing circle of investors. The security is adequate and the liquid position in fact is particularly good ex-

cept for an annual lionising of initial profits by £60,000 of secured debentures earning the generous rate of 5£ per cent. The debenture issue is matched by sinking fund investments totalling £47,000 in the latest balance sheet against £38,665 in the previous year. The time may not be distant when another substantial redemption of the debentures is carried out, -as was done with £40,000 of the issue in 1942. Tlie company has' a habit of restricting its comment-in the annual report to the barest minimum. It totally excludes any detail of important financial changes and consequently a review in retrospect becomes a laborious task, less informative than it should be, because in certain vita] aspects it is unaided by factual data. In one ‘ other respect also the company clings to an outmoded'conservatism in retaining .units of equity shareholding in cumbersome £5 shares. Because of theSgelative unpopularity of high-priced segjjjjties. fills is a real disadvantage to wishing or compelled to sell' oatfcf.and it can be freely predicted that if subdivided into £1 shares the current value would be nearer 38s than the 34s 6d represented by to-day's value of the £5 shares.