MONEY MATTERS.
Financially, the year has been an unsatis- factory one, the Chinese residents being most 'under the weather," and their stringency, coupled with war effects, the rising exchange and so on, has had a most depressing effect on the share market. The most relieving feature has been the continual enhancement in the value of the shares of our premier bank, the Hongkong and Shanghai, which began the
!
year at $710 and reached $915 in August, Their subsequent decliue to $860 was due entirely, we may suppose, to the desire to transmute dollars into geld, when the unusual rise in exchange seemed to make that the only popular transaction. The closing rate of $860 is still $150 more than the closing rate of 1901. The benefit of this will be felt most by the shareholders at Home, who are supposed to possess fully eighty per cent. of this popular stock. The substantial rise had sub- stantial canses, the very solid administration being an important factor, and the Bank made enormous profits from the several Japanese war loans, and the Shanghai-Nanking Railway loan. A rich corporation like this is also enabled to take greater advantage of the fluctuations in exchange by which others may be embarrassed. The H. & S.," indeed, appears to be so firmly founded that even a cyclone of commercial crises cannot shake it. Banking generally ought to have flourished on the increasing turn-over; and we are therefore particularly to note the disappearance during the past year of the local branch of the Imperial Bank of China.
sorry
SHIPPING,
Shipping shares were a feature to which the public looked vory hopefully during the year, but though charters were plenty and freights high, shareholders can scarcely be said to have been satisfied, "Indo-Chinasto rose to $132 on the strength of the "fat" year; and the 'disappointment (in some cases telegraphed half way round
world) at the small im- provement on
·13 "loan year returns, still rankling. There was an immediate slump from $125 to $100 in June. and they are carried into the new year at $90.
the
J
19
any
OF DIVIDENDS IN GENERAL. We do not say the policy of the directors was wrong altogether; but in view of the p-ouliar conditions under which most stocks are held in this Colony, more consideration might be ex- tended to those investors whose interest endures for terms of four to six years, and then ceases, without injury to posterity. After all, the most permanent investor imaginable canunt prefer the fluctuating dividends to which he is accus- tomed we are not now speaking of particular company) to returns more consistent with earnings. We will probably have to wait for England's lead for legislation on this burn ing question; but in the meantime, we commend to the consideration of thoughtful persons (including His Excellency the Governor and all others set in authority over us) the unhealthy possibilities underlying a wholly unfettered discretion which may hoard up money and suddenly, without warning or sufficient cause, announce a "thumping" dividend: It is not a new problem, the relation of business and speculation: but such years as 1905 bring it more forcibly before us, and so we may be excused for this apparent digression. To avoid any misunderstanding, we should say at once that the returns from shipping generally were not in accordance with what were looked for, and disappointment was not confined to any one company.
J
MARINE INSURANCF.
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A good shipping year spells a good insurance year, usually, and so far as we can asscertain, there is no reflex here of the unceasing grumb ling on the London market. "Uuious" rose from $690 to $710, and for them the new year opens most hopefully." Cantons" began at $250 and close at $325, Yangtszes rose $20, and "China Traders" progressed from $57 to 891, the closing rate being a cum dir, oue. Here the feature of the year has been the combination, not actually accomplished, but decided upon; & decision almost universally extolled, and an example that seems well worth the consideration of such companies as united might flourish and divided fall. Fire insurance companies have for some reason not attracted speculation, and their quotations at the end of the year are just what
THE HONGKONG WEEKLY PRESS AND
they were at the beginning. Their exclusion from the field of speculation appears to have done them no harm, the happy investors in "Hongkong Fires" drawing eleven per cent, and " China Fires" eight and a quarter.
year,
4.
SUGAR.
A serious drop in prices was experienced at the beginning of the year, but now the market is becoming steadier, and prospects are regarded as bright. Local refineries did well during the "China Sugar" and Taikoo (a private concern) distinguishing themselves. Hongkong people are very largely interested in China Sugars," and are hoping for a repetition of the handsome returns of 1904. The shares touched 8246 during the year, when there was perhaps too much speculation; and the closing drop to $200 is due to reports of the big continental beet or p, to the cheapness of raw sugar and Java sugar, and, of course, partly to the general depression. This serious decline has discomfited several holders who had bought on time. "Luzons" fluctuated from $15 to 881 owing to rumours that the property was to be sold, and once they got down to $14. They clos at 824.
MINES,
Very little interest was taken in these things, aud with the exception of Chinese Engineering and Mining Co.'s stock, things are as they were at the end of 1904. "C.E.M's," having produced an attractive dividend, start the new year at Tls. 3.70.
WHARVES AND GODOWNS,
The Kowloon Wharf and Godown Co. has had an exceedingly busy year, and must have earned handsome profits. I'he shares, however, appreciated only four dollars in the twelve month, due no doubt to the policy of spend ing largely on improvements out of revenue, & policy good for posterity, but not appreciated by the average Hongkong investor. Say a merchant buys 200 of these shares with spare capital: he is satisfied with his five per cent and the safety due to the spending of three or four per cent on his asset. In two or three years, however, as in 1905, there comes a light year and high exchange; a d he needs the capital. He sells out, and leaves others to reap the benefit of those improvements,
[January 8, 1906.
INDUSTRIES,
Our local cement works ("Green Island") have had a good year, and owing to increasing business, had to venture on a new issue of one for every two old shires. This made the average, market value $263; and the closing rate (a steady.
one) is given at $283. The Hongkong Cotton Mill made a splendid showing during the year, the shares closed at rates only a trifle higher paying ten per cent, on the reduced capital, and
than they opened. In view of the general boom in cotton, the prosperity at Shanghai, in India and Japan, those who hold original $100 shares complain that they have a right to expect a little better return than the actual
one
per cent and are hoping that the keep in the vau of progress. During the year, management will make strenuous efforts to all other stocks practically held their own, with some insignificant retrogressions; and while more "hustle" and enterprise is undoubtedly called for, the concensus of opinion is that local business is weathering a crisis with comparative credit.
GENERAL RETURNS.
Below we give sundry returns under various collected at rather short notice. Supplemen. headings, which have been compiled and tary figures will be given as they come in.
EXCHANGE.
The year opened with a T.T. rate of 1/11-3-16, which gradually advanced until 2/0-1-16 was reached late in January, before the Chinese New Year,
After that festival, with its very disastrous settlement by the Chinese of their liabilities, rates foll away until the lowest point of 1/97 was reached on 10th April. Rates held their own after that, moving quietly between 1/10 and 1/11 until August. A prevalent opinion that rates would fall as soon as the war was over was entirely disproved by events subsequent to the peace of August. Exchange continued to be steadily firm and for the mail of 22nd August the T. T. rate advanced to 1/11 and it has not been below 1/11 since. In November a sharp. rise occurred owing to demands for silver both by Russia and India, and also for the redemption of the war notes in Manchuria by Japan. Rates advanced to over 2/1, early in November and before the end of that month had touched 30 pence per oz., a price which has not been "Docks" have been sore point with equalled during five years, and the T. T. ad- investors and dealers. George "Fenwicks vanced to 2/14 where it remained for three ¡daya started at $45 and closed at $5; "Hongkong With slight fluctuation, it went back during and Whampos" started at 216 and closed at the first half of December to. 2/04, although. $164; "Farnhams" started at Tls. 153 and closed the price of silver advanced nutil it touched 30 at Tis. 125; and "New Amoys" started at $275/16d. per oz. For a similar high price of silver,
а man who
A BAD YEAR FOR DOCKS,
and closed at $17.
'T'has
chose Far Eastern docks in 1905 as
**
an
expenses
investment would begin again this year with about three fourths of his original capital. The war is blamed for the bad business, steamers taken off the regular lines to serve as transports and so on. Increasing competition lowering prices without a orresponding drop in probably has a good deal to do with it. The Hongkong docks suffered disappointment during the year at the failure to raise the wrecked French cruiser Sully. It most appear singular that with Hongkong enjoying the reputation of being the world's leading shipping port, with over nineteen million tons of shipping passing through, our dooks should have to complain of scarcity of employment. It is a mercy in view of this strange development, that the proposals of two years ago, to build more large docks here, were defeated. Of course we look forward still to a time when the present docks will not be able to cope with all the work offering; but such optimism was im- possible in 1905. What we cultivated then was patience.
LAND.
The year 1905 was marked by a curious shrink- age of land values, property declining in cases as much as twenty and twenty-five per cent. This was due, no doubt, to the financial stringency and the absence of speculators, As a result, "Hongkong Lands retrogressed from $147 to $124; but "Humphrey's Estates " held their own. ending the year as they began, at $12.50, An appreciation of $2.50 in eighteen years, however, is nothing to boast of; and now that combinations are in the air, we won er if a merger of land investment companies might not brighten things for 1906,
we have to go back to 1896. The year closes with a firmish market at 2/-9-16 T.T. Silver has slightly weakened and closes at 29/- 15-16, and while not posing as prophets, we think there is every prospect of the dollar remaining in the region of 2/- for some time to come. In this connection it is interesting to note the different opinion held in two neighbouring colonies. In Hongkong there appears to be a strong predilection in favour of low exchange, but opinion in Singapore seems to be concen- trated in favour of a high exchange.
YARN.
The trade of last year on the whole may be said to have been a brisk ons and more profit- able to importers than previous years. This is accounted for by the small stooks which were available at the commencement of the year, cheap raw material and bumper crops of food. stuffs. It was not as remunerative to the native dealers, as the violent fluctuations in exchange and the recent tightness of the money market had an adverse effect, and some severe losses had to be faced. The year closed with an unusually heavy stook and a slack market.
PIECE GOODS.
Cotton had a phenomenal rise during late months which has tended to make business. difficult. Without that rise there would bare been more disastrous results, to the Chinese than they have yet experienced. It helped to steady prices
COTTON.
Importers have not done badly during the past year, for though values here have not responded to the enhanced cost in Bombay, the steadiness of silver and rise in exchange have ( more than covered the low in prices, Chinese dealers did not however fare so well. Imports