COMMODITY MARKETS AND PRICES.

Manawatu Standard, Volume LVII, Issue 206, 31 July 1937, Page 5

COMMODITY MARKETS AND PRICES.

BUSY SHARE MARKET. (By “Penloo.”) Active trading continues on tlie Stock Exchanges of the Dominion and prices appear to be holding well. A recent feature has been the demand for bank shares, also for other New Zealand companies, quite a number of them finding favour with investors. The companies whose shares are dealt in are what may be termed the better class of companies; they are sound and doing a good business. The prices for all good shares are high, and the yields comparatively small. Brewery shares were in fair demand during the past few days. Dominion Brewery shares were on sale at 45s 6d with no declared buyers. This concern is offering 10,000 of its unissued shares of £1 each at a premium of 7s 6d per share, but the ■shares are available only to existing shareholders. With this issue, all the shares of the company (50,000) will have been placed on the market, and this must have an effect on future share values. If the business of the company expands there should be no reduction of the dividend; on the other hand, if the turnover is no greater than it is at present, it could not be expected that the company would maintain its preseiit rate of dividend on the increased capital. All breweries are apparently doing well and the beer consumption is increasing. Shares of Australian companies continue in favour with New Zealand investors, who appear to be widening their investments and buying shares that would, previously, have been passed by. Most Australian joint-stock companies are doing well, being influenced by the remarkable monetary return realised by Australia for wool, wheat and other primary products. The overseas trade position of Australia is also satisfactory, the Commonwealth having accumulated a large credit balance in London. Broken Hill Proprietary shares have been favoured by investors for a long time past and their confidence in the venture appears to be fully justified, for the earnings of this concern are on a large scale, and its interests are varied. The capitalists in Australia are enterprising and the latest venture —the manufacture of newsprint.—is a welcome addition to the industries of the Pacific. The cost of newsprint has risen greatly because of the demand for cellulose for the manufacture of rayon, the output of which is increasing rapidly. The Australian company will work upon a forest area of about 350.000 acres, and this, it is estimated, will supply the requirements of Australia and New Zealand for a century.

WOOL STATISTICS. The wool statistics compiled by the New Zealand Woolbrokers’ Association provide very pleasant reading. The gross value of the wool sold in the season just closed was £15,344.231. This was realised for 686,994 bales. In the immediately preceding season although the quantity of wool sold — 756,333 bales —was about 19,000 bales more than in the last season, the gross value was only £10,083.297. or nearly £3.500,000 less than in the last season. But comparing gross values is apt to be misleading; therefore the average price per bale may be taken as affording a better view of the market. In the season just ended the average price for New Zealand , wool was £22 6s 8d per bale, as compared with £l3 6s 6d in the previous season. A jump of £9 per bale is exceptional and our prosperity so noticeable is due to this. Large as the average price was in the past season it falls below the average of several past seasons. In 1924-25 the average was £29 5s per bale or about £7 per bale more than in the past season. Wool can go much higher, and it would be higher if some of the consuming countries like Germany and Italy were capable of buying to their full requirements.

There, is practically no carry-over wool in the Dominion, which is a matter for satisfaction. Users of our wool must wait for fresh supplies—until the wool has grown and is fit for the machines. The production of wool in the past season was 767,132 bales, of which 98,864 bales were slipes, the rest being greasy wool. The clip in the season of 1937-38 will be larger because of the increase in the sheep population of about 1,000,000. This increase should provide an additional 20,000 bales, and if the price next season is as good as it was in the past season that should put an additional £450,000 in the pockets of sheep farmers.

But what of the future? It is never safe to predict the'future of the wool market at any time, and it is niore risky now because of the unsettled state of affairs in Europe, and the restrictions on international trade. The wool markets of the world are governed by Bradford, and there is no reason to anticipate that there will be any slackening in the Yorkshire demand. Industrial activity is still very marked in Britain, the unemployed are now comparatively few, and Britain’s export trade is being well maintained. GUR SECONDARY INDUSTRIES. According to a statement published this week, local manufacturers are becoming alarmed at the big increase in imports of the class of goods manufactured in the Dominion. It must be remembered that our secondary industries manufacture for the local market only and not for export. If their only market is taken from them the consequences must be serious. Imported manufactures are underselling local manufactures. Owing to high costs of production and the inability of local manufacturers to reduce costs, they demand increased protection from imports. To afford that protection, import duties must be raised, and it is a question whether the Government will take such action. In the meantime the Minister denies that the position is as serious as stated.