THE FINANCIAL MARKET

Sun (Auckland), Volume IV, Issue 965, 7 May 1930, Page 11

THE FINANCIAL MARKET

MOVEMENTS REVIEWED WEEK ON ’CHANGE By “Noon Call.” Event has followed event In quick succession in financial circles over the week, and, from the New Zealand producers’ viewpoint, the past seven days have been most interesting ones.

The announcement of a further reduction in the Bank of England discount rate to 3 per cent., the first time since 1923, must be eventually reflected in New Zealand. It indicates, if nothing else, a determined attempt by the central banks of the world to usher in a period of cheap money, for all the principal central banks have moved with London. The news of the favourable reception accorded the New Zealand loan by the London Press, and its subsequent over-subscription, comes as a further palliative to a sick market.

The outstanding bearing influence, in so far as it has a direct bearing on New Zealand, has been the announcement that the Canadian Government is legislating against the importation of New Zealand butter by raising the tariff to four cents. When it is realised that New Zealand sent little short of £2,000,000 worth of butter to Canada this season, this move appears to give rise to grave concern at first glance. Those in a position to speak authoritatively, however, seem to consider that an advance of IJd in the tariff will not keep our butter out; that it will merely mean that Canada will have to pay more, as the Canadian farmers cannot suply the whole of that country’s requirements.

It is a little hard to understand the Government’s move as the Minister of Finance, Mr. Dunning, is reported as having said in the Commons as late as March 26, 1930, that the Canadian Government had the much longer end of the stick in the existing agreement. ITe quoted figures showing that for the last financial year Canada had sold goods to New Zealand to the value of just under three million dollars more than she imported in return from New Zealand. He voted against an amendment to repeal the present treaty and it was lost. MARKETS FOR PRIMARY PRODUCE Overseas markets for primary produce have shown little movement during the past week. Butter is a little weaker following the withdrawal of speculators, and the arrival of the first of the new season’s Danish at a low price. The outlook for wool is largely intermingled with the labour position. Nevertheless, reports indicate that there is a decidedly brighter tone in the market, and prices should be on slightly better levels before the end of the year. The metal markets are rather weak and show further declines, largely as a result of the recent decision to curtail armaments. These markets, however, have little direct bearing on the New Zealand producer, INVESTMENT MARKET STILL DEPRESSED The investment market continues in a very depressed state, and there is no doubt that there is much truth in the contention that there are a, number of interests across the Tasman, interested in falling prices, which are not averse to spreading further bearing propaganda whenever opportunity offers. Many shares which have dropped well below the mean market level of the past ten or. fifteen years must be good buying to the careful selectors today. Sellers predominate on all New Zealand exchanges at the moment, in some cases as a result of panic at the continued falls in prices for apparently sound stocks, but mostly because of the immediate need for ready money overdraft reductions, income-tax, or increased cash for ordinary business transactions. In the meantime, until things right themselves, the ordinary investor sees the paper value of his securities falling and gets gloomier and gloomier, quite unnecessarily, as the turn to better times must come in the near future.

Below is a summary of the latest sales of some of the more popular stocks on the New Zealand market, with the return on investment. Except where otherwise mentioned, the companies are well managed and have satisfactory reserves. In every instance the chances of market appreciation when times are better are very bright. All should be good buying at present prices.

Latest Approx. Return Price per £100 Com. Bank of Aust . ~1 cl. £ s. d. Bank of N.Z. ...... 2 17 N.Z. Insurance .... 2 British Tobacco . . l Beath and Co 1 o N.Z. Farmers’ Fert 0 IS Mount Lyell 1 0 14 16 2 -Mew Zealand Farmers given above do not show quite the comparative strength most of the others. Of reserves as Following are latest sales .New Zealand ’Changes during the week ended May 6, giving the return on vestment: — inLatest price. Return BANKS— s. d. £ s d. .Aust. of Commerce 3 o Adelaide 6 Australasia 12 Eng., Scot. «Sr Aus. G National of N.Z. . 6 National of Aust. 6 0 5 11 1 (con.) 7 0 New South Wales 38 13 6 Union of Aust. . 11 INSURANCE— 6 0 5 10 7 National 0 o South British . . 2 LOAN AND AGENCY— 19 4 6 10 Goldsbrough, Mort. 1 10 N.Z. Guarantee Cor. 0 COAL— 7 11 8 S Renown (pref.) . 0 o Ditto, new issue . . 0 GAS— 2 — Auckland .. .. i o r, Ditto (con.) . . o 17 4 Christchurch (con.' 0 13 Gisborne 0 1:: Timaru 1 SHIPPING— 2 0 5 Devonport. Steam . 1 1 Huddart-Parker . . 1 18 Ditto (pref.) .... 0 19 Northern Steam . . 0 TIMBER— 14 6 S 0 0 Kauri Timber . . . . 0 WOOLLEN— 13 6 5 11 1 Kaiapoi 0 BREWERIES— 10 6 6 9 6 N.Z. Breweries *. 2 11 7 o J. Staples 2 MISCELAXEOUS— 0 5 4 2 British Tobacco . . 1 - Burns, Philp .. .. i ir> g Colonial Sugar .... 41 Dunlop Perdriau .. 0 Electrolytic Zinc 16 6 5 (ord.) 1 Farmers’ Trading, B 4 0 10 0 0 (pref.) 0 12 Gear Meat 1 Keinpthorne Prosser 3 Milne and Chovce, 0 6 3 1 deb. stock . . .. 1 6 11 N.Z. Refrigerating . 0 10 Ditto (con) .... 0 0 W ilsons Cement . . l 19 11 W ellington Meat . . 0 DEBENTURES— 8 Auck. Gas, 1936, 6i 102 INSCRIBED STOCK— 0 0 C 0 5 War Loan, 1938, 4£ 97 17 6 4 16 S Ditto, 1936, 5?; p.c. 99 5 0 5 13 Ditto, 1932, 5i p.c. SS lo 0 5 1$ s