AUSTRALIAN MONEY MARKET.

Auckland Star, Volume LX, Issue 246, 17 October 1929, Page 4

AUSTRALIAN MONEY MARKET.

MASKED DEPRESSION. PRICES OF SHARES FALL. SHADOW OF LOANS COMING DUE. Reviewing financial conditions in Australia, Messrs. J. B. Were and Son, Melbourne brokers, in their circular letter dated October 4, write as follows: — "The share market weakness has been accentuated and the general price level is now definitely lower, with sellers predominating. To instance only the banking section of the market, there is a seller for practically every issue with a paucity of: buyers. The numerous adverse influences outlined .last week are still in evidence, and we see no reason to look for a recovery in share markets for some time, because indications point definitely to a further hardening of interest rates. Commonwealth Bonds. "Investors are still giving most attention to the short-dated issues of Commonwealth loans, most of which have been fairly busy at easier rates. The average return over the whole market is £5 10/' per cent to-day (excluding the 6 per cent issue due in March next) compared with £5 5/1 per cent at the end of June and £5 3/11 per cent at the beginning of the year. "The scarcity of funds available for giltedged investments is evidenced by the fact that of the £4,785,000 of Victorian 5 per cent and per cent loans which fell due on Tuesday less than half was converted into 5Vi per cent Commonwealth Bonds issued at a discount of £1. Before 31st December next approximately £9,579.379 of Government and public body loans issued in Australia will mature and must be replaced or renewed. Further Loan Requirements. "In March, 1030, a Commonwealth loan of £10,750,000 will mature and it is probable that, in connection with the replacement of that »loan, the Commonwealth will take the first steps to deal with the loan of £61,900,000 maturing in the following December. It is not possible to say now what amount of new loan money will be required by the Commonwealth and State Governments and public bodies while these maturing loans are being dealt with, but £10,000,000 is possibly a conservative estimate. In addition, several semi-Governmental bodies will be requiring loan funds. At the end of the month the Australia Gaslight Company will seek to raise £1,500,000 by a e per cent debenture issue, of which, however, £950.000 is for conversion purposes. * Future Outlook Obscure. "Circumstances have postponed for Australia the post-war readjustment which in other countries has been in progress for several years, but we have now entered upon what appears to be a period )f industrial and financial readjustment ivhich eecms likely to extend beyond the ('ear. 1930. We shall, therefore, have for i considerable time to come a money narket under the strain of large conversion and new loans co-existing with

! secondary industries in a state of unrest; ] and, in addition, it seems certain that ! our primary products of wool and wheat, upon which we depend so greatly to increase our real wealth, will realiso lower : prices and also be affected by a somewhat adverse season, so that from this source there will be far less money available for investment than in recent years."