THE MONEY MARKET

Ashburton Guardian, Volume 52, Issue 205, 11 June 1932, Page 7

THE MONEY MARKET

THE QUESTION OF EXCHANGE. NECESSITY FOR CONFIDENCE. THE WEEK ON 'CHANGE. \ (Written for the "Guardian" by Investor.) Last March one of my friends, who contested a seat at the last General Election, put to me the very straight question: "What, in your opinion, is holding up the return of more prosperous conditions?" Fortunately, I had thought that one out, and I replied: "Lack of confidence." It was at once urged not to become "mushy" in my thinking, but the evidence is accumulating that the reply was not so far wide of the. mark. In the United States they are making huge credits available in many avenues, but trade continues to fall, employment dwindles, and the outlook becomes more threatening. Even those individuals and firms classified by the banks as "credit worthy" will not make use of the provision available, and from all sides today we hear of lack of confidence. It prevents the manufacturer manufacturing and the buyer buying, and this world-wide psychological state will have to be recognised, and, in some manner, altered before the much needed advance siarts. Now and again one comes across an individual who is seizing what he calls his "great chance," and most of them are men who have lived through other depressions. The danger is that people are prone to think that there is something permanent, something stable, aboiit this depressed state of affairs, but, really it is no more permanent than was the period of prosperity that pre-> ceded it. • It is to be hoped that the Government has carefully considered what steps it will take if, after the exchange pool comes to an end, any bank attempts to force the Dominion into the course imposed on Australia, the < pool had this distinct advantage-it ensured that our London balances were there for the needs of the Dominion, and could not be tapped for other purposes, and, whatever happens, that limitation must .he maintained. It is essential to the maintenance of a sound position. The strength of the Government section is very marked. No 5* per cent, issue could be bought, at time of writing at a price that, with commission and charges, would make the total below par. Buyers' offers for practically all issues have moved up tins week. The 4* per cent, have changed hands from £92 5s to £92 17s 6d and further buyers at £92 10s are 7s 6d up for the week. Early dealings in 5£ per cent, issues were at £99, but since been sold at £99 5s to £99 12s 6d and buying quotes generally show an upward move of 5s to 7s 6d. The Banking Section. The banking section has not been active, and despite the reports from Sydney of strong markets, price movements have been small. Commercials have been the most prominent, with business from 13s 2d to 13s 6d, buyers straying in at 13s 4d. Offers of £64sfor the prefs. were without result. New South Wales had sales at £24 17s 6d and £25 2s 6d, and Unions are firm at £6 16s 3d and £6 16s. * All centres have had dealings in New Zealands/ cum. div., 42s 9d being the lowest, and 43s the highest price reported. Nationals are easier with sales from £3 2s 6d to £3 Is 6d, and more offered at the lower figure. , Interest in the insurance section continues. Nationals have been turned over at lis 3d and lis 2d, New Zealand* from 36s 6d to 36s 9d South Bnish at 49s 9d and 50s 6d, and Standards at 395. This section is very firm at Pr Onee'again Goldsbrough Morts have accounted for the bulk of the business in loan and agencies. Prices eased a little, from 21s 6d to 21s 4d, but the turnover was not large. ' Two sales of Huddart Parkers at 22s and three of Union Steam prefs. at 19s 3d indicate a return of interest in shipping shares. Coals and woollens, however, have had a bare market thus

tar. .„ N.Z. Refrigerating issues are a trifle easier. The paids were sold at lis 5d and lis* 3d, and the partly-paids from 4s 2d to 4s. , ■ Tlie breweries section is another to record firm quotations. Dealings in N Z.'s have been from 24s 4*d to 24s 6d, and in Staples' at 23s 6d. Tooths have not held all the advance recorded last week, for there have been sales from 27s to 26s 2d, but buyers stayed in at 26s Id, against 25s lOd last week The miscellaneous section has not been to the fore. British Tobaccos cum div. went from 28s 6d to 28s Id, but Wilson Cements were steady at 275, and Milburn Limes were turned over at 24s 6d and 24s 3d. There has also been business in N.Z. Paper Mills at 19s and 18s 6d, and in Auckland the dealings in more local issues have been fairly numerous. The Mining Division. In the mining section, Alexandras have hardened. The conts. cum div. had sales at 15s 6d, and 20s was offered for the others. Okaritos are now ex div., but they are firm, with sales from 8s lOd to 9s 3d. On the other hand, Waihis weakened from 15s to 14s Bd, and sellers are asking 14s lOd against 15s 6d a week ago. Golden Dawn came from 5s 9d to 5s 7d and then moved up to 5s 9Jd, and Mahakipawas after sales at changed hands at 4d. For the prefs. of the latter company 6Jd and 6d have been paid. Other sales included Mount Lyells at 16s 9d and 16s 6d, Cornish Points at 2d, Golden Points at 5d and Sid, Golden Progress at Is lid, and Gillespie's Beach at £d premium. Work on several claims on the West Coast is being pushed ahead, and whether holding shares or not all can hope that the enterprise shown will be rewarded. The

Dominion would welcome a steady increase in the gold output, especially if it came from the development of _ a large lode, for that is the class of mining that makes such a heavy demand upon the labour market. But, in any form, increased activity will be a good thing.