Stock and Commodity Markets
Media
Part of The American Chamber of Commerce Journal
- Title
- Stock and Commodity Markets
- Creator
- Hall. A. C.
- Language
- English
- Source
- The American Chamber of Commerce Journal Volume XXV (No. 7) July 1949
- Year
- 1949
- Rights
-
- Fulltext
- the “ultimate in misunderstanding of the contemporary situa tion in the Philippines.” The Philippine Embassy in Wash ington has been instructed to refute the article. The Australian Government has offered 4 fellowships and 1 scholarship to deserving Filipino students and technicians for study in Australia. Two Filipinos are now in Australia under fellowships granted last year, one studying animal husbandry and the other vegetable oils. June 23 — The Department of Foreign Affairs makes representations with the Chinese Legation for the return of 223 Chinese who were apprehended a few days ago in Quezon Province after their illegal landing. June 24 — The President appoints Anastacio de Castro as manager of the National Cooperatives and Small Business Corporation. The President creates a committee headed by Ricardo Nepomuceno to plan a coordination of the functions of the Capital City Planning Commission, the National Urban Plan ning Commission, and the People’s Homesite and Housing Corporation. The Cabinet discusses the advisability of sending a diplo matic representative to the Vatican. June 25 — Announced that the Board of Textbooks, Dr. Gabriel R. Manalac, Chairman, is prepared to consider the adoption of textbooks for Philippine public schools. June 27 — In ceremonies at Malacahan, 24 former alien properties of various categories, ranging from real and per sonal to stocks in former enemy corporations, to an aggregate value of P793,420.75, are turned over the the Philippine Gov ernment by the Philippine Alien Property Administration. The National Economic Council approves a 5-year plan for the rehabilitation of the tobacco industry with the recom mendation that the National Tobacco Corporation undertake it with starting funds of P3,000,000 obtained from the Re habilitation Finance Corporation and the Philippine National Bank. The Council also decides to recommend the establish ment of a national shipyard in the Mariveles-Sisiman area in Bataan, the project involving a total outlay of P16 000,000. The proposed shipyard would handle repairs, drydocking, and ship-construction, practically all the machinery needed being already available from reparation materials received from Japan. June 28 — The President issues Executive Order No. 231 amending the import control regulations “with a view to fur ther conserving Philippine dollar reserves by an estimated P60,000,000 or more a year. (The order is reprinted else where in this issue of the Journal.) June 29 — The President at the request of Secretary P. L. Mapa of Agriculture and Natural Resources, releases an other P100.000 for the purchase of seeds to be issued to small June 29 — The President reorganizes his Cabinet “to ef fect more efficiency and more speedy action,” as follows: Sabino Padilla (Secretary of Justice) becomes Associate Jus tice on the Supreme Court; Ricardo Nepomuceno (Secretary of Public Works and Communications) becomes Secretary of Justice; Prospero Sanidad (Senator) becomes Secretary of Public Works and Communications; Marciano Roque (Under secretary of Interior) becomes Assistant Executive Secretary and Technical Assistant to the President; Nicanor A. Roxas becomes Under-Secretary of Interior. Banking and Finance By C. V. Grant Sub-Manager, National City Bank of Neiv York THE first Regional Conference of the National Association of Bank Auditors and Comptrollers of the Philippines was held on June 3 and 4 in Manila. The Conference was attended by some 150 enthusiastic delegates from the banking communities throughout the country as well as by several bankers from abroad. Among the bankers who addressed the Conference during the first day of the session were Secretary of Finance Pio Pedrosa, Governor Miguel Cuaderno of the Central Bank, Chairman Delfin Buencamino of the Rehabilitation Finance Corporation, and President Vicente Carmona of the Philippine National Bank. During the session the following day the speakers In cluded Mr. C. R. Leaber, Manager of the National City Bank of New York, and Mr. Albino SyCip, Presi dent and General Manager of the China Banking Corporation. The speakers stressed the importance of the Cen tral Bank in the future development of the nation as well as the need of utilizing the reserves of idle capital in the hands of the public in order to attain the Gov ernment’s economic objectives. The delegates elected the following officers for the next two-year term; Mr. L. L. Pan, Auditor of the China Banking Corporation, as President; Mr. Conrado Sevilla, Auditor of the Philippine National Bank, as Vice President; and Mr. J. V. Macuja, Assistant to the Chairman of the Rehabilitation Finance Corpora tion, as Secretary-Treasurer. ON June 24 the Central Bank advised that until further notice it would sell dollars to the com mercial banks at 200.81 for Telegraphic Trans fer, and 200.76 Demand, against the previous rates of 201.00 and 200.95 respectively. No alteration was made in the rates at which the Central Bank will buy dollars from the commercial banks, i.e., 200.75 for Telegraphic Transfer, and 200.70 Demand. The rates between which the banks are permitted to quote for dollar exchange remain as follows: Selling Buying U.S. Dollars, T. T over $500.00 ............. P201.50 P200.50 U.S. Dollars, Demand over $500.00 ........ 201.375 200.375 U.S. Dollars, T.T. and Demand under $500.00 ................................................. 202.00 200.00 At this writing the banks generally are quoting for prime business Telegraphic Transfer 201.25 sell ing and 200.625 buying. Editor's note:— No figures on total circulation, bank resources and liabilities, deposits, loans, etc., later than those published In the June Issue of this Journal, have been released by the Central Bank. Stock and Commodity Markets By A. C. Hall A. C. Hall & Company May 21 to June 21, 1949 NEW YORK STOCKS. — Automobile, Oil, and Steel shares weakened, causing softness in other sections of the general list. The market easily slid through the 171 area of the Dow Jones In dustrial Averages, and proceeded to test the post-war major lows in the 160 area, established during Oct ober, 1946. However, no great selling-pressure dev eloped at any time during the decline, and the mar ket held fractionally above these important lows. Since then prices have recovered a portion of the lost ground quite readily, but the rally has failed to gene rate activity, thereby casting doubts as to the mar ket’s underlying strength. At the moment, the posi tion would appear as follows: Any further advance on dwindling activity would very probably be follow ed by a renewed sell-off and test of the recent lows. If the latter holds again, a substantial recovery could follow this formation. However, penetration of the 160 area would probably result in important selling developing. Market fluctuations during the period, as mea sured by the closing Dow Jones Averages, were as follows: 288 Industrials .... Rails ............. May 20 High Low Jane 21 173.49 173.49 161.60 165.71 46.96 47.10 41.03 43.27 There is evidence of a deepening of the reces sion, and general business policy at the moment seems to be to further reduce inventories in expection of lower prices. The question uppermost in most busi nessmen’s minds is how much worse does it have to get, before it gets better? This point is also troubl ing investors at the moment, so perhaps a brief ex amination of the general market background may be helpful. In the past, bear-market declines in stock prices have shown considerable relation to the speculative excesses of the bull markets which have preceded them. With this in mind, it is of interest to compare the effect of the great post-war period of industrial activity on security prices, as compared with the 1936-1937 boom. In the following table, the shares of a number of outstanding companies, embracing most of the im portant industries, are used to illustrate the two periods. All prices are adjusted to the present cap italization of the companies involved. The first col umn shows the relationship of 1936-37 between peak earnings per share and highest share-prices on the basis of multiples of earnings per share which then prevailed. The next column shows the correspond ing multiples of the post-war period. Subsequent columns contain: the hypothetical post-war highs if peak earnings had been capitalized on the basis of the 1936-1937 multiples, the actual post-war highs registered, and the June 21 closing levels. Allied Chemical & Dye 23 American Can Co......... 24 American Tobacco Co. . 20 General Electric Co. .. 30 General Foods .............. 16 General Motors ............ 14 International Harvester 20 Kennecott Copper ....... 15 Sears Roebuck ............. 18 Standard Oil of New Jersey ....................... 13 U. S. Steel Corporation 16 Mull,pini Fo.t-W. r Ihxbt Po.i-'t'tr Ihpotbrh. l * >lr 21 15 $330 $212 $166% 14 194 112 89% 13 152 100 67% 12 121 52 35% 13 68 56 41% 8 136 80 54% 9 78 34 23% 7 130 60 43% 8 104 49 36% 7 158 90 63% 8 64 32 21% It is clear from the table that, on the surface at least, speculation has been very much restrained dur ing the period following the war, as compared with the last industrial boom period pre-war; also that stocks have declined substantially from post-war highs. Of course, the foregoing comparison cannot be considered as all inclusive by any means. It can be contended that times have changed, consequently, for many reasons, the previous relationship prevailing between stock prices and earnings possibly does not apply nowadays. While admitting the logic of this contention, as a result of the vast changes in the national economy which have arisen out of the late war, it seems reasonable to infer, in accordance with fundamental economic law, that new factors which operate to limit upside extremes will also tend to moderate downside fluctuations. Commodities. — The government policy of per mitting wheat stored on the ground to participate in the loan up to 75% of the full loan value has reversed the recent easier trend in prices; July Chicago wheat at $2.00 compares with $1.95% on May 20. The offi cial crop report as of June 1 indicates a larger crop than 1948. Corn was steadier in sympathy with other grains, healthy demand, and slackening country of ferings; July Chicago was quoted at $1,321/8 against $1.31% on May 20. As regards Cotton, the Journal of Commerce estimates this year’s crop at 15,000,000 bales. Good spot demand sustains nearby prices with July New York at 33.12 compared to 32.60 a month ago. Domestic Sugar futures were very steady with September No. 5 Contract advancing to 5.46 from 5.44 over the month. Refiners appear covered until early July. Seasonal increase in consumption is ap parent, but is possibly running somewhat less than estimated. Manila Market. — The downward trend in min ing-share prices continued during the past month. The market action reflects the continuing slow-down in local business activity, which in turn is in line with world trends. Arising out of the war, there are unbalanced price relationships in our economy, and these require adjustment. The signs are that the process will not be unduly delayed. The Commercial and Industrial section was quiet and easier in sympathy with the general trend. MINING SHARES COMMERCIAL SHARES Over-the-counter business during the period in cluded 9,000 shares Benguet Consolidated, high, 4.25, low 3.90, close 3.95; also 5,300 Philippine Iron Mines Common at P25; and 155,000 shares Taysan “A” from 10 to 13 centavos, closing at the latter price. Other business included 850 shares Jai Alai at P7; 3,900 shares Manila Jockey Club at P2 and Pl.95; and 110 shares Victorias Milling Co. at P150 and P145. 289 GROSS SALES (TEN LEADING BUSINESS FIRMS) 1937-1949 Bureau of the Census and Statistics (1937 = 100) 1937 1938 1939 1940 1941 1945 1946 1947 1948 1949 January . . . . . . 95.1 75.5 88.8 106.7 104.8 _ 49.6 160.9 225?2 “ 213.5 * February . . . .. . . 102.5 71.6 80.3 99.8 95.9 — 34.6 228.9 228.3 241.3 March................ . . 105.9 85.2 87.1 104.3 107.2 — 61.1 218.8 257.5 289.6 April................. . . 107.5 81.4 79.8 100.3 105.6 75.1 155.3 254.0 231.2 May.................... . . 100.4 76.9 80.1 97.5 113.0 1.6 117.5 216.0 273.8 261.3 June................... . . 100.3 76.6 107.7 103.5 117.0 5.4 85.3 249.4 308.7 — July.................... . . 105.7 72.0 90.8 98.8 110.0 8.4 89.7 240.4 313.2 ___ August................ . . 97.4 75.2 90.8 98.3 109.8 10.4 118.9 202.8 272.2 ___ September . . . . . 83.4 76.8 103.3 93.1 114.0 110.7 116.4 219.2 261.1 — October .... . . . 97.0 80.1 103.4 85.8 100.1 10.8 147.0 222.9 252.5 ___ November . . . . . 100.4 104.2 110.1 105.6 97.7 21.4 165.1 278.7 215.8 ___ December . . . . .. 104.3 88.6 119.4 119.1 64.8 27.9 184.4 291.8 253.4 — • Revised figures for January, February, and March. Credit Real Estate By W. J. Nichols By C. M. Hoskins Treasurer, General Electric (P.I.) Inc. C. M. Hoskins & Co., Inc. THE May 7 and May 14 issues of the Saturday Evening Post cariied an interesting article on Dun and Bradstreet, Inc., the world’s oldest and largest credit agency. An indication of the scope and importance of credit information lies in the fact that the firm employs some 8000 people in the United States, has an income of about $45,000,000 a year, and supplies reports to around 76,000 suscribers to its services. It was Arthur D. Whiteside, President of Dun and Bradstreet, who coined what has become the semi-official definition of credit,—“Man’s Confidence in Man.” The next general luncheon meeting of the local As sociation of Credit Men will be held on Tuesday, July 19. It is planned to have a guest speaker give a short talk on some topic of special interest to the members, followed by a general discussion of the subject. We are hoping that this will be only the first of a series of regular quarterly meetings during which problems affecting credit executives can be brought into open forum. Since its incorporation in 1932, the Association has grown into an organization consisting of some 69 of the leading business institutions in the Philippines and has assets in excess of P23,000. Formed to establish closer credit co-operation among members and to obtain greater security and certainty in busi ness customs, the Association is constantly seeking ways to improve its services. THE real estate market in Manila was relatively quiet during June, with 259 sales registered having a total value of P2,793,217. Total num ber of sales continued high, and land values conti nued firm. The transactions analyzed showed a somewhat lower price for buildings, in line with de clining building costs. This is reflected in compara tive peso totals of preceding years. Comparative figures for the first six-months periods of 1946 to 1949 are as follows: January - June 1946 .......................................................... P18 513,538 1947 .......................................................... 37,632,010 1948 ......................................................... 27,938,224 1949 .......................................................... 20,058,383 Mortgages registered in June were up to P7.558,958, as compared with P5,583,332 for May. Private mortgage funds are entering the local real estate market in growing volume. THE new Revised Charter of Manila contains seve ral new features of interest to real estate inte rests. The Municipal Board is now authorized to re quire property owners to build sidewalks in front of their properties; if they fail to do so, the City may REAL ESTATE SALES IN MANILA, 1940-1949 Prepared by the Bureau of the Census and Statistics Note: A large percentage of 1945 sales and a diminishing percentage of 1496 sales, re present Japanese Occupation transacti ons not recorded until after liberation. January February March . April . . May . . June . . July . . August . September October . . November December Total . . P17.974 844 P10,617 285 P22,890.133 P45,537,914 P68.260 104 1940 P 6,004,145 918,873 1,415,246 883 207 403,866 542,187 1,324,861 1,905,828 1,141114 993,103 938,416 1,504,004 1941 P 962,970 779,783 1,532,104 988,380 1,129,736 598,431 559,742 1,239,414 815,112 1,182,678 858 235 (?) 1945 P 7,943,605 1,337,830 (?) 213,262 962,008 1,212,780 1,123,565 699,740 1,870,670 2,096,893 2,555.472 2,874,408 1946 P 4,385,011 2,267,151 2,622 190 1,916,293 3,684 937 3,637.956 4,974,862 4 438,510 4,698,896 5,545,800 3 340,384 4,025,926 1947 P 6 030,012 7,217 317 7,166.866 8,611,076 4,618,181 3,988,560 4,097,183 5,627,572 7,437,213 6083,486 4,177,054 3,205,584 1948 P 3,644,734 3 879,633 4,243,719 5,021,093 3,129,799 8 019,246 5,146,529 6,192,876 4,737,581 5,350 376 3,046,287 5,386,248 P57,798,121 1949 P 3,965,420 2,701,668 3,362,635 3,677,630 4,253,395 2,793,217 P20.753.965 290