FINANCIAL OUTLOOK

Sun (Auckland), Volume IV, Issue 1037, 30 July 1930, Page 11

FINANCIAL OUTLOOK

THE WEEK ON ’CHANGE MOVEMENTS REVIEWED By “NOON CALL” The brightest feature of financial and commercial circles over the past week has been the improvement of the London butter market. The Budget propos-ais came a further bearing factor on the confidence of investors in sound securities, and prices have received an additional set-back. Indications now are that the recent improvement in the London butter market will be sustained, and that there may even be a gradual upward movement right up to November, when the flush of the southern hemisphere output will start to come on the market. At the moment, the statistical position is regarded as sound, while supplies from Continental countries are falling off, helping to stimulate the demand for New Zealand produce.

The wool and frozen meat outlook shows little change, but, although prices at the last wool sales in London dui not show any real improvement on those of the last series, there was a brighter tone in the market, and it seems that there will be a fairly widespread demand when the southern hemisphere season opens. Everywhere—London, New York, Australia, New Zealand, it makes no difference—it seems that markets are passing through a rather critical stage. For the past decade every effort has been concentrated on increasing production, and the time has now arrived for stimulating consumption. The change-over is difficult and longdrawn, but even the most conservative of critics overseas agree that a real improvement can be looked for in tho near future.

N.Z. Investment Market Although there have not been any really substantial falls in the prices, of sound investment stocks over the week, the market has a weaker tone, and trading on New Zealand Stock Exchanges has fallen to a comparatively low ebb, brokers, generally, experiencing the slackest business period for many years. The reason is not so much that there is no money available as the fact that the investing public is tending to lose confidence under the seemingly endless series of hearing factors which have come to light in recent months. The Budget proposals constitute the latest bearing influence, but even these, under careful analysis, should not make any real difference to tho value of many sound stocks offered on the market today. The feature of business at the moment is the very keen demand for Government stocks and bonds, free-of-income-tax issues in particular. As in all previous times of stress, the investing public is playing for safety, and is attracted by tho gilt-edge section. A few public body loans are being dealt in but. for the most part, the market for this class of security has a rising tendency, and indications are that any of the smaller local bodies would have extreme difficulty in raising money within the Dominion at under 6 per cent. Even at 6 per cent, it would be difficult.

Bank shares are meeting with a limited demand, but the price declines of recent months have frightened a large number of investors, and the section is suffering as a result. Commercial Bank shares continue popular, and meet with a steady demand, frequent sales taking place on Australian and New' Zealand Exchanges. At the present price the shares seem very good buying, os the approximate return, based on the 15 per cent, dividend rate, is only round £5 2s lOd per is made for the final dividend which is due within the next week or so. The market for New Zealands is a little weaker, but, even so, at present prices tho return, based on the latest dividend rate, is only round £4 2s lOd per cent.; if this was the only return the shares would be dear buying, but the bank has been making considerably more in recent years than it has been paying out in dividends, and it is the expectation of participation in the surplus profits which makes the scrip attractive in certain quarters; how the directors will be able to arrange a distribution of surplus profits without meeting with considerable criticism from the Labour and more Socialistic section of the community, however, is a. problem yet to be solved. THE WEEK'S INVESTMENTS Below is a summary of recent sales of better-class shares, giving the approximate return on investment based on the latest dividend. In every case, the latest price up to July 29 is given. Latest Approx. Price. Return per £IOO. BANKS—

MORRINSVILLE DAIRY COMPANY All previous production figures were eclipsed by the Morrinsville Co-opera-tive Dairy Company, Ltd., last season, when the output of its butter factory amounted to 1,577 tons, as against 1,212 tons for the 1928-29 season. The average payment made to suppliers, irrespective of grade. was 16.406 d. To this is to be added the dividend recommended to be paid upon the amounts paid up on shares, which upon the average is equal to .065 d. making the total average payment to shareholders 16.471 d. The company’s turnover during the 1929-30 season totalled £220,948. Its assets are valued at £50,542. The annual summary showed that, the number of suppliers had increased from 90 in 1923, when the company was established, to 315 this year. The output had increased from 247 tons to 1,577 tons, while the cost of manufacture had been reduced from 2.6 d a lb. f.0.b., to 1.32 d. OIL FROM SHALE LONDON, Tuesday. Important developments in the extraction. of oil from shale may result from the pending visit to Australia of Mr. Crozier. inventor of a retort. The results achieved in Tasmania through this retort, it is said, may be applied to other shale deposits and Mr. Crozier will inquire into the possibilities of the production of oil from coal*

Australian of Com. 1 2 g G 4 5 Commercial of Aust. 1 1 i Com. of Sydney 20 2 6 G 4 3 National of X.Z. . . S 16 0 s 3 b Nat. of 'Asia (con.) 7 0 0 7 2 10 New South Wales . 36 2 G 10 8 New Zealand .. .. 2 lb 0 b 2 10 Union of Aust. 11 b 0 5 11 1 INSURANCE— National 0 14 0 5 7 New Zealand .. .. 2 6 0 4 3 4 FINANCIAL— Dominion Invest & Banking: 1. 0 0 7 0 0 Goldsbrough, Mort . 1 7 6 7 5 5 GAS— Auckland 1 _ 0 6 8 Christchurch 1 5 s G 4 8 MISCELLANEOUS— Westport Coal .. .. 1 13 1 G 1 0 Leyland-O'Brien 1 5 0 G 13 N.Z. Breweries 2 10 0 G 0 0 Tooths 1 7 10 8 11) British Tobacco 1 17 0 Burns, Philp .. 1 13 0 G 2 Colonial Sugar .. .. 36 10 0 G 17 Milburn Lime . . . . 1 14 0 Kenipthorne, Prosser 3 2 G G 8 0