THE MONEY MARKET

Ashburton Guardian, Volume 48, Issue 157, 14 April 1928, Page 6

THE MONEY MARKET

REVIEW OF PAST QUARTER. ADVANCE IN BANKING SECTION. IMPROVED TRADE INDICATED.

(Written for the “ Guardian ” by Investor.)

With the Stock Exchange closed for the Easter vacation, there has been time for reflection. The first quarter of the year was one of marked activity, and the markets tended to become steadily stronger. Indeed, taken all round, the level of quotations was much higher last week than at the commencement of the business this year. In the case of tax-free Government issues the buying offer has gone from £96 12s 6d to £97 10s and these issues have accounted for the bulk of the business in this section. .On the other hand the oi per cent, issues, maturing earlier, have eased in price, and; to-day are available at about 20s below the selling price of mid-January. 01 course trustees have such a wide choice of investment these days that they are not inclined to pay any big premium for an investment. Local bodv debentures can be obtained practically at any time. ’ The great advance during the past three months has been in the banking section, and in seme cases the jump in prices has been most marked. For instance. Adelaides are now wanted at £9 13s 6d as against £8 13s in .January, while New South Wales have gone from £46 2s 6d to £4B. And inother instances there have been substantial advances made. Admitting that the price level is high, the point of interest is whether it will he maintained. Here all depends upon monetary conditions in the Commonwealth. Last year, it will be 'remembered, there was a record number of new issues, the aggregate running into many m lions of capital. This year that money should be effective in extending the operations of the banks, and in financing the handling of the clips and crops, so that, as usual, one comes to tlie familiar conclusion that much, if not all, depends upon the agricultural and pastoral outlook in the Australian States . . , And there is some ground tor sane optimism oil that score. Ihe stiength of the loan and agency-issues indicates confidence in the position. Latest advices from Australia are to the effect that everybody is anxious not to sell but to buv sheep. There is said to be ample feed for stock, and recalling how wonderful is the pow-ei of lecu peration over, there a prosperous season can be anticipated. One factor in thp Australian market which must be borne in mind is that this year there will he heavy loan redemption transactions which may have an effect. “The coming event,” states one report, “is casting its shadow on the banking pathway and managements consequently are still inclined to be conservative, although they state that they are ‘quite comfortable. Our neighbour, in an industrial way, has some leeway from last year to make up but they state with conviction mat “prospects throughout the greatei pert of the agricultural and pastoral areas of Australia were never brighter at this time of the year than at present. Well, we must wait and see. In. the Dominion we have had a_ good season, and the trade and bank returns indicate a remarkable improvement. What we now want is a statement by the Minister of Finance covering the past financial year, in LJZt Air Downie Stewart addressed a public meeting at Feilding and gave some interesting particulars. Ibis year it would be fitting if he would do the same thing in a southern centre and let us know, approximately, how the Treasury lias fared. Possibly a>n iavitation, judiciously timed, _ would bring the Minister to Canterbury to make his awaited .statement.