INVESTMENT MARKET

Sun (Auckland), Volume II, Issue 457, 12 September 1928, Page 12

INVESTMENT MARKET

SHORTAGE OF SOUND STOCKS INTEREST RATE STILL FALLING Bs' “NOOX CALL.” September 12, 9 a.m. Recent cables from London complain of a shortage of investment stocks. New Zealand investors are similarly placed. There is a decided shortage of sound industrials at the moment, and competition continues to force the market for all popular securities to high levels—levels upon which prospects of immediate return are made to appear very low. In the insurance section South British have Ion*? shown a small' immediate return, but over the week several industrials have strengthened, until now it seems that purchasers are placing their faith upon a repetition of past performances and the prospects of disbursements from hidden reserves, rather than upon the mere continuation of the present dividend rate. The market for many shares allows a return of little more than 4 per cent., while, during the week, some have dropped below that figure. Among the latter shares are: N.Z. Breweries, at 51s returning £3 18s 5d per cent., compared with a market price of 445, showing a return of £4 10s lOd at the corresponding date of last year. Colonial Sugars, at £63 returning £3 19s 3d per cent., compared with £53 and £4 14s 4d per cent., last year. With the increase in the amount of capital made available over the past few months the tendency has been to place it in channels where, even though immediate prospects are not particularly bright, sound administration augurs favourably in respect to increasing profits and subsequent bigger disbursements to shareholders. Banking Section Quiet ' The banking and insurance sections over the week have seen little movement and quiet tracing has been recorded. In the loan and agency group the firm tone of recent weeks has been maintained, and one of the most noteworthy features has been the increased strength of N.Z. Loan and Mercantiles. Sellers on the Auckland ’Change are firm at £llß, with buyers imprdved to £ll2. Dalgetys are receiving more attention at £ls 2s 6d. Taupiris have been responsible for the most notable movement in coals, the market registering a further decline to seen the ordinaries dealt with at 26s 6d. Hikurangis continue to attract steady buyers, but the scrip now is strongly held, and holders, for the most part, seem inclined to wait until the end of the year before unloading. The company certainly must be showing a satisfactory turnover. Devonport Steams have come into the limelight again, moving up to 25s after fairly heavy trading. Dealings in the miscellaneous section were fairly widespread, although little change has been noted in the market. N.Z. Refrigerating shares have recovered slightly and the market now has a decidedly firmer tone. Sanfords are also receiving more attention with more buyers in the field. Rubber Merger Proposals Rubber shares have been practically neglected during the past month or so. In reference to this it is interesting to note that advice from across the Tasman is to the effect that slmreholders in the Perdriau and Dunlop Rubber companies should not be kept in suspense much longer regarding the terms of the proposed rubber merger.. The scheme of the amalgamation will probably allow of the formation of a holding company to acquire all the shares in the Perdriau and Dunlop companies, and present shareholders will receive shares in the new company for shares now held. In order that the shareholders should receive equitable treatment it has been found necessary to revalue the assets of both concerns. It is known that the Perdriau assets were valued very conservatively in the books, so the revaluation should disclose large inner reserves. There is no doubt as to whether Dunlop- shareholders will receive any dividend in respect to the past year’s trading, as it may be necessary to conserve its resources to enable shareholders to receive five shares in the new company for every four now held. Perdriau, on the other hand, is expected to pay a final dividend of at least 10 per cent., as profits for the past year are likely to show a marked increase. One result of the merger will be a reduction in overhead and working costs, and there is likely also to be a big increase in output. Return on Investment Below is a. summary of sales made on X.Z. ’Changes during the week ended September 12, giving the approximate return on investment. The first column gives the figure at which the lntcct snio

gives the figure at w was made hich the latest sale Latest Approx. Price. Return. BANKS— £ s d £ s d Australasia 14 19 0 Com. of Australia Nat. of Australasia 1 10 8 4 17 10 (£5 pa.) 9 10 0 New South Wales . . 50 15 0 4 IS New Zealand . . . . 1 4 13 Nat. of New Zealand 1 6 4 18 10 Eng. Scot, and Aust. INSURANCES— S 12 0 4 9 6 National 0 16 5 4 11 New Zealand . . . . 4 0 4 3 South British .... 3 LOAN AND AGENCY— 3 6 3 13 6 National Mortgage . 4 ;; 0 5 17 '8 Goldsbrough Mort . . 2 11 D&lgety and Coy. . COAL — 15 2 6 5 13 Hikurangi (ord.) .. 0 5 10 Ditto (A pref.) .. 0 9 0 W estport 1 10 6 12 Taupiri Westport Stockton 1 6 6 7 10 10 (ord.) GAS— 0 3 S — Auckland (ord.) 1 2 1 6 IS 8 Ditto (con. ) . . 0 17 6 19 Christchurch, (ord.) . 1 Ditto (10s pd.) . . TIMBER— 0 12 O' 6 6 10 National SHIPPING— 0 9 9 — Devon port Steam . . Northern Steam 1 5 0 6 0 0 (ord.) 0 14 6 s 0 Howard Smith . . . . WOOLLENS— Kaiapoi (cum. div.), l 6 9 5 19 11 (ord.) 0 13 3 16 11 Ditto (7s pd.) .... 0 4 4 4 17 Wellington (ord.) .. BREWERIES— 6 12 6 7 10 11 New Zealand .. .. 2 11 0 5 Staples 1 19 6 White Star 0 13 0 7 13 Tooths 5 1 C. L. Innes (pref.) . MISCELLANEOUS— 1 0 0 S 0 0 Amusement Park . . 0 5 British Tobacco 2 4 0 Colonial Sugar (Aus) Electro. Zinc (pref. 65 0 0 3 19 ex. div.) 1 13 6 7 3 Gear Meat Holden's Motors 2 1 0 4 17 7 (cum. div.) . . . . 1 9 0 10 C H.M. Arcade (pref.) 1 0 5 18 Morris Hedstrom . . 1 i 0 N.Z. Express . . Milburn Lime and 0 17 6 9 2 10 Cement i 14 3 5 16 10 Sanford Ltd. (pref.) - i 0 3 N.Z. Refrigerating . 0 19 7 15 Ditto (con.) .. . , 0 9 S 2 N.Z. Sugar and Milk 1 0 Hayword’s Pictures 1 0 0 9 0 Wilsons Cement 1 IS 9 Taranaki Oils .. .. 0 s 0 .—

MINING— Waihi 1 Mount Lyell 0 DEBENTURES— N.Z. Ins. stk., 1933, 51 p.c. . 101 5 0 Ditto. 1941, 54 p.c. Auck. Harbour Bd., 99 12 6 5 9 \ 1941, 6 p.c 104 15 0 Auck. Gas, 1935, 64 North Cant. Hospital 102 5 0 6 1 11 Board, 1931, 54 . . 99 10 0 13 9 N.Z. Breweries, 10 1 4 0 S 6 S 1