LONDON MONEY MARKET.

Auckland Star, Volume LXIII, Issue 288, 5 December 1932, Page 4

LONDON MONEY MARKET.

CONVERSION LOAN SUCCESS

"HONOURING OBLIGATIONS." POSITION OF STERLING. (Received 10 a.m.) LONDON, December 3. The loan conversion was brought to a triumphant conclusion on December 1, when a turnover of more than £600,000,000, the largest amount recorded in any market, was completed without disturbance, despite the war debt uncertainties and exchange complications. The expected increase of market supplies and credit has not materialised, us authorities had been many weeks purchasing unconverted war loan, testifying to the care and skill wherewith the entire conversion hail been planned. War debts have overshadowed the markets. Gilt edged movements are unusually wide, but there is not the slightest evidence that confidence has been affected. The city admittedly was more concerned in honouring the obligations to America than the economic consequences thereof. Recovery in gilt edgeds significantly followed inspired reports that Britain would pay if America insists. The fall of sterling is out of proportion to actual business transacted.

There ie no evidence of a flight from fixed interest securities owing to inflation fears. Contrariwise, the trend of industrials is downwards. The worst feature of the decline in eterling has been the destruction of cohesion between the; sterling bloc. Scandinavian, South American and other currencies linked to sterling appreciated. Sterling's decline was aleo a powerful stimulant to the deflation of gold prices. Most commodities have fallen during the week. Meat and wool are the notable exceptions, but wheat touched a new low record.