FINANCIAL OUTLOOK

Sun (Auckland), Volume IV, Issue 1061, 27 August 1930, Page 11

FINANCIAL OUTLOOK

MARKET ON ’CHANGE THE WEEK REVIEWED By “NOON CALL" Dark clouds continue to move across the finanical horizon, until the feeling in financial circles is such that pessimists are receiving more attention than is good for the community. Further price declines have been recorded in the stock market over the past week. fJUHS outlook lor the New Zealand producer has shown practically no change during the week. The butter market is weak, but that is largely clue to the fact that the reactions of the Canadian elections are only now being properly felt. Events during the past day or so, however, give rise to the forecast that the full tariff increase will not be put on as the retaliatory measures of the New Zealand Government have been registered in Canada already in unemployment figures. A case to the point has come to the notice of the writer in which a tyre company, which has drawn a large portion of the tyres used in New Zealand from its Canadian factory, has made arrangements for the bulk of its l'utgre supplies to come from its English factory. Other manufacturing concerns not so happily placed will find restricted markets with the higher prices the new tariff will make necessary. Up against this, the Canadian manufacturer will be compelled to bring increased force to bear on the farming community to reconsider the tariff proposals. Heading exporters in this country still hola the view that Canada will be compelled to look outside, tariff or no tariff, for portion of its butter requirements this season.

The wool and frozen meat situation shows little change. POSITION IN AUSTRALIA

Australia has come into the limelight of the financial world again during the> past week as a result of the publication of Sir Otto Niemeyer's report on conditions as lie found them there. He told the world little more than it already knew, but he did make some observations which were well worthy of serious consideration, particularly those with regard to the r.eed of bringing down costs of production. The Commonwealth’s expressed intention of moving in accord with Sir Otto’s advice on economy has been favourably received in London, and it does seem that Australia will soon be able to start moving toward a period of reconstruction upon sound premises. When this takes plaee the reaction will be felt in New Zealand. The first result of Sir Otto’s report has been an all-round decline in the market for Australian stocks, a decline noticeable particularly in industrials quoted on the New Zealand Stock Exchange. Severe falls have been recorded over the past day or so. Although this tendency'is not one for rejoicing, it is not one which should give rise to undue gloom on the part of those able to hold. Although Australia is in for rather a difficult period of reconstruction, her position is not nearly so bad as it has been at other periods in her history; most of the shares held in .New Zealand are in well-managed concerns with substantial reserves built up to help over a period such as the present. When recovery comes, as there is every indication it will, however much it is delayed, paper losses will be more than made up. NEW ZEALAND INVESTMENT MARKET

Further strength has been recorded in the gilt-edge market over the past week, lour and a-half per cent, free of income-tax bonds and stocks moving up to sec a healthy volume of business at -par. Other Government stocks also meet with a steady demand at a price which allows a return of slightly over five and a-half per cent. The market for bank and industrial shares is more depressed than ever, buyers being more than ever inclined to hold off the market until such times as they can be definitely assured that a real change for the better is taking place.

Below is a summary of some of the better class shares dealt in on New Zealand Stock Exchanges over the past week, giving the aproximate return on investment based on the latest dividend. Owing to the unsettled state of the Australian market only shares in New Zealand companies have been selected:—

Market price. Approx. per a 100. X. d. J2 d. Auckland Gas . . L 4 0 ft 13 4 Christchurch Gag .. 1 4 4 fi 11 6 Hill and Plummer . 1 1. 12 4 Taupiri Coal . . . . l 6 10 1 Kempthorne, Prosser :{ 3 G 10 31 X.%. Paper Mills . 0 10 15 10 Wilsons Cement .. 2 0 b 6 0 X.Z. Guar. Corp. . . 0 13 11 Northern Steam /. 0 14 r, 0 Robinson Ice Cream 1 3 10 2 X.Z. Breweries . . 2 10 o 5 IS