Money is Cheaper in New Zealand

Sun (Auckland), Volume III, Issue 652, 2 May 1929, Page 1

Money is Cheaper in New Zealand

COMPARISON WITH LONDON LOCAL BODIES IN FAVOUR Reasons for the favourable position occupied in the financial market by New Zealand local bodies are given by Messrs. J. B. Were and Son, the well-known stock brokers, of Melbourne: “An index to the London market for Dominion gilt-edged securities,” the firm states in its publication, “has been the offer of City of Auckland 5 per cent, debentures, redeemable in 1945, at a price giving a return of £ 5 8s per cent. Their net price of £95 (approximately) contrasts with their issue price in 1923 of £99. “Seeing that Auckland and most other New Zealand local bodies are now borrowing in New Zealand at 5| per cent, at par—in most cases with brokerage of £1 per cent, or 10s per cent, or even no brokerage at all, compared with charges of £2 15s per cent, to £ 4 per cent, in London —it will be recognised that New Zealand local bodies are very favourably situated at the moment. “This is an outcome of such favourable factors as the* great improvement in New Zealand’s overseas trade position —exports for the year ended 31st ultimo having reached the record figures of £ 57,154,343, compared with imports of £45,105,865—and the material expansion of the Dominion’s bank deposits in comparison with advances. “One of the causes given for the London market recently having been dull was the fact that investors were waiting on the Budget. This has now been delivered and contains no proposals likely to affect investments to any extent. “No early improvement in conditions can be expected until the results of the British general elections are known next month, and the position with regard to sterling exchange, gold reserves and the bank rate becomes more reassuring.”