BRITISH CONDITIONS.

Auckland Star, Volume LXII, Issue 306, 28 December 1931, Page 4

BRITISH CONDITIONS.

IMPROVEMENT FORECASTED.

STOCK EXCHANGE CHEERFUL. STEELING FIRM. LONDON, December 26. Ths London Stock Exchange broke up for the Christmas holidays in a fairly cheerful mood, for though business in all sections had been small there was a marked improvement in British funds. This was chiefly due to the firmness of sterling.

The result oi the general election in Australia had little effect on the prices

oi Australian stocks, for they had recovered considerably before the polling, the Stock Exchange having anticipated the Nationalist party's success, though the size ox its majority exceeded even the most sanguine expectation.

Financial writers generally forecastan improvement after the turn of the New Year. Many draw attention to the steady recovery from a precarious position and publish" tables showing how a number of Commonwealth and State stocks have improved £20 to £28 from the lowest mark touched in 1931.

Attention is also callcd to the possibilities of profitable buying of Australian bank shares, several of which already have iiseu well. The writers argue that now that Australia has a sound Government the companies connected with finance are likely to .be the first to 'benefit from the change in politics. No Permanent Benefit. "The Economist's" trade view again is somewhat depressing. It says:—"Three months have elapsed since Britain's suspension of gold payments. It is becom-ing-clear that the resultant stimulus to British industry is being neutralised by a curtailment of the volume oi world trade and no real permanent benefit has materialised yet.

"The recent improvement in the iron and steel industry was only temporary and business is slipping back to the summer's low level. The absence of any demand for steel products and the disorganisation of the Continental industry, render progress impossible.

"The cotton trade has lost part of its rccently-gained ground. Labour difficulties at home, uncertain markets abroad and .Japan's suspension of the gold standard are all hindrances to further recovery. Some Brighter Features. •"The new British import duties damped down the foreign demand for raw material, but there are some .brighter features. The following industries report fair progress: Locomotive and motor .building trades, and the rayon and. linen ( textile industries. "The unemployment returns for November show improvements in coalmining, glass, tin plate, general engineering, textiles, leather, paper, dock and harbour services, and the distribution trades. "Against these improvements, setbacks are recorded in the iron and steel, shipbuilding and building and contracting industries." A cheering feature, which the '"Economist does not record, is the increasing demand for factory sites in Britain. This can only be regarded as indicating an improvement in business. The London Chamber of Commerce reports having received numerous -inquiries and a fi'.'in of estate agents states that in 1931 it received a far greater demand for factories than in previous years. Inquiries .were almost trebled in the last three weeks, partly owing to the suspension of the gold standard and the possibilities of new tariffs. The inquiries came from home, Continental and American manufacturers. Factors in Dominion Trade. The close of the year sees the markets for most Australian and New Zealand food products depressed. The prices of meat, nutter, cheese and eggs are all disappointingly low. The ibutter decline is not surprising for the total of the imports for 11 months of 1931 was no less than 55,790 tons above the corresponding period of' 1930.

Weddels' report, in discussing the dec-iine or "20/ to 22/ a cwt since October 2, says:— "Various factors were responsible. The outstanding one was that Denmark, whence came about one-third of our supplies, abandoned the gold standard rather earlier than was cxpected, so that with the heavy arrivals of Australian and New Zealand butter ample stocks, fully sufficient for the market's requirements, have been available from sources not affected by our abandonment of the gold standard.

"Other factors were low offers for forward shipment from New Zealand and Australia —particularly the latter—the pressure of some weaker holders to sell current arrivals, and the knowledge throughout the trade that the make, 'both in Australia and New Zealand, was comparatively heavy. Hence the bearish position of the market here."