THE FINANCIAL OUTLOOK

Sun (Auckland), Volume IV, Issue 1067, 3 September 1930, Page 11

THE FINANCIAL OUTLOOK

MARKET STILL DEPRESSED THE WEEK REVIEWED By “Noon Call’’ September has been ushered in on a world where conditions are totally different to those of a year ago. Whereas this time last year we were almost on the top of a financial boom, we are today down in the depths of a world-wido depression. In itself, that is merely a platitude, but, nevertheit: conveys a wealth of meaning to those in touch with the position, for the mere fact that we are suffering trom depression is some indication at least that the trend to better times is a little nearer than it was a year ago when everything had a fictitious value. The past week had not been noteworthy for the development of brighter features, but, on the other hand, nothlng of an exceptionally depressing nature has occurred. The New Zealand producer has seen the butter market apparently touch bedrock, and the latest cables more or less confirm • ° that a slight improvement in the market would not be unexpected. This month will see the woolselilng season open in Australia, and this will give New Zealanders some indication at least of what to expect at the opening sale which takes place toward the end of November at Auckland. Overseas critics are not unduly gloomy about the wool position and are more or less agreed that there will be a better demand on the lower levels. The frozen meat market shows little movement, the most interesting development being the increasing attention given to the process of sharp freezing and marketing of meats In transparent packages in a manner which does away with the need of the retail butcher and brings the trade within the scope of the chain store. It is a development well worth the consideration of New Zealand exporters, for not only is it considered that the new method will reduce the costs of marketing, but it is also believed that it will put the New Zealand beef producer on tho same basis as the shipper of Argentine chilled beef inasmuch as the quality of sharp frozen meat is supposed to be equal to, if not better than that of chilled. THE INVESTMENT MARKET The demand for gilt-edged securities, more particularly short term Government stocks, has tended to increase rather than decrease during the past week. The market for this class of investment is very firm. Free of income-tax securities are hard to locate in this section and sales have been put through at prices which allow an approximate return of slightly under 4* per cent. Companies with big reserves find even this nominally low rate of interest attractive in view of the comparatively high taxation. Although from the meagre information available, it seems that the Government’s over-the-counter’issue of 5§ per cent, bonds and inscribed stock is being taken up mostly in small lots by private investors, the short-term loans at the same rate quoted on the New Zealand Stock Exchange meet with a very firm demand, and here also sellers are hard to locate at prices which will allow a deal. The present firm demand for giltedge stocks is a well-known sign of depression, when the investing public turns to the safest avenues for investment and looks to security first and return afterward; it is also an indication to those who know their financial history that there must be good buying in other fields for wise selectors. A little more attention has been paid to bank shares during the past few days and although certain stocks in this section have touched new low levels since the publication of Sir Otto Niemeyei*’s report, many students of trends are agreed that the VVik group is well worth watching, for mere are a mirnber of shares which should prove very profitable holding if bought in at today’s prices. The same can be said of a number of shares in well managed industrial concerns. Below is a summary of some of the better class shares which have changed hands on the New Zealand market over the past day or so, giving the approximate return on investment based on the latest dividend: Approx.

PESSIMISTS REFUTED LORD RIDDELL ON THE OUTLOOK “There is a delusion current among commercial men that when trade is bad advertising should stop. That is a complete error. You should advertise more than when trade is good.” With these words, Lord Riddell introduced his speech to the Publicity Club of London. America is doing well, he continued, because she advertises, because she is creating an American atmosphere. Britain was not doing so well as we would like to do because the British manufacturer, as a general rule, did not believe in advertising. “We advertising people,” his Lordship said, “have a serious responsibility. It is up to us to see that our country is properly represented abroad, that a proper mechanism is created for selling British goods abroad, and that our manufacturers can secure expert advice in placing goods on the market in the best manner. "1 am convinced that the future of British trade abroad depends on efficient advertising. “I am not one of those who think business is getting worse. I think, on the contrary, that we are not doing so badly. If you will look at the records of the public companies you will realise that most of those companies have done better in 1929 than they did in 1928. “I am not speaking on this subject because 1 am afraid for our country This is, of course, an extraordinary country, with an extraordinary background and with an extraordinary export position. We have an excess of imports over exports of merchandise You have to remember that we have large sums owing to us from abroad. [Whereas with such a country as Australia an excess of omports over exports spells ruin, with us it is, in many respects, a sign of prosperity.! “It is a very extraordinary fact that if a British importer wants information about foreign markets he must go to an American advertising agency to get it. That is not as it should be. “It is a very difficult thing for us to appreciate that other countries have changed during the last ten years almost in the same proportion as this country has changed. It is very difficult for traders who do not go abroad to realise that the selling methods that are required in foreign countries have changed, that advertising has advanced there as much as it has over here.”

Market Return P BANKS— £ s. d. £ s. d. Aust. of Commerce. 1 1 0 6 13 4 Australasia 1 L 10 0 r> l 9 Com. of Australia. 0 19 9 7 11 1 1 Eng-., Scot. & Aust. 5 12 6 6 13 New South Wales . . 0 13 « New Zealand .. . . 2 IB 2 0 Union MISCELLANEOUS— 10 7 *6 6 0 0 Goldsbrough, Mort . 1 7, 10 8 7 10 N.Z. Breweries . . . . 2 9 3 H 1 10 British Tobacco 13 7 5 5 Electro. Zinc (pref.) 1 1 0 9 10 5 N.Z. Farmers’ Fert. 0 IS 9 8 10 5 Westport Coal . . . . J 1 0 9 0 Kempthorne Prosser 3 0 9 6 11 8