THE FINANCIAL OUTLOOK

Sun (Auckland), Volume IV, Issue 977, 21 May 1930, Page 13

THE FINANCIAL OUTLOOK

POSITION ON ’CHANGE THE WEEK REVIEWED By “Noon Call” A slightly better tone has been recorded in financial circles over the week, and there are signs that a gradual lifting of the present cloud of depression is not far away. There certainly seems to be a little more money available for investment in sound securities, and there is a greater feeling of confidence with respect to the near future for the overseas markets for primary produce. | Overseas, little has happened during the past week which can have any important direct bearing on New Zealand. The general trend of the money market appears to be continuing toward low interest levels, with more money available for sound enterprise; markets for primary produce show little change. The wool sales opened in London with prices up to expectations, and a generally brighter tone all round; once there is a real improvement in the English trade, with Labour satisfied and prepared to pull its full weight, prices should make a real move toward profitable levels again.

The butter market continues to fluctuate and is, if anything, a little weaker, with heavy stocks of Northern Hemisphere new season’s butter having a bearing influence on the general level of prices; even on present low levels, consumption is not increasing to the extent which might be expected; speculators do not appear to be operating with any force, and buyers, generally, seem to prefer to handle just sufficient stocks to keep them going from week to week. KEEN DEMAND FOR GILT-EDGE SECURITIES

As in most periods of depression when there is a general feeling of uncertainty about all classes of investments, gilt-edge Government and local body securities are the most popular investments at the moment. There is every indication that the market would show an appreciable hardening but for the fact that the Government’s present 54 per cent, over-the-counter loan is being offered to the public and there is nothing to show when it will be closed, or even how much it is desired to raise under the present issue. The fact of a seemingly limitless loan hanging over "the investment market is sufficient to act as a check on any big forward commitments, and it certainly is an effective barrier in the way of any movement toward higher prices and the consequent lower interest levels.

The four-and-a-half free-of-income-tax Government loans are changing hands freely on the New Zealand £?tock Exchange on a very firm market, going mostly to big companies and trustee concerns with ready money available for investment; to be able to place their surplus capital in avenues which are not subject to income-tax means much to a big company. The extent to which companies are availing themselves of these war-time loans was indicated in the balance sheet of Wilsons’ Cement, issued recently; practically the whole of this company’s substantial reserve fund is invested in free-of-income-tax loans, a further big parcel having been acquired during the year. For the man or woman who has a little capital to invest, there is no doubt that Government bonds are the wisest investment in cases where the investor cannot afford to take risks, and the present issue at per cent, is undoubtedly attractive. ATTRACTIVE INDUSTRIALS ON 'CHANGE Trading on New Zealand Stock Exchanges has been spread over a comparatively wide range during the week, banks and sound industrials receiving the greatest attention; there has been a slight weakening in the market for certain Australian stocks, but this was not unexpected as, with the market as it is at the moment, buying and celling come as waves; any sign that the market is about to improve brings in the marginal investors; forced sales, and this is still the big factor which is keeping the market on low levels, also seem to come in waves. Among the securities which have changed hands during the past week on New Zealand Stock Exchanges the following have attractions from the point of view of the man in the street; apart from the fact that the rate of return on present prices is very satisfactory, there is every chance of an improvement in the market price of the shares once the financial position improves. In the following instances the return is based on purchase at market prices, based on the latest dividend: i Market Approx. Price Return

Henry Jones scrip is attractive because of the wide spread of this company’s jam and preserves manufacturing' activities; besides controlling the -Oak” and “K” factories in New Zealand, the company has wide interests in South Africa and Australia. Australian Class has practically a monopoly of the glass trade in Australia. Wilsons Cement return is worked out after subtracting the Is 6d per share due this month.

£ s d £ s d N.Z. Guar. Corp. . . 0 8 0 8 6 S Farmers’ Trading .. 0 S 6 9 8 3 Henry Jones .. # . . 1 9 0 6 17 9 Electro. Zinc (pref.) 1 6 0 9 4 7 Australian Glass 2 1 0 6 1 0 Wilsons’ Cement . 2 2 0 6 3 G