COMMERCIAL STERLING FUNDS DECLINE

Press, Volume XCI, Issue 27556, 13 January 1955, Page 12

COMMERCIAL STERLING FUNDS DECLINE

RECENT CHANGES IN COMMONWEALTH

“ FINANCIAL TIMES ” COMMENT

Sterling balances of some o£ the important Commonwealth countries have been falling in recent months and. together, Australia and New Zealand have lost about £150,000,000 since the end of June last year, says the “Financial Times.” The New Zealand decline, it says, has been in some ways even more spectacular than the depletion of Australia’s sterling holdings, which led to the reimposition of import controls. At the same time, India’s planned efforts to achieve a moderate balance of payments deficit, as part of the general financial policy of speeding up development expenditure, has started to produce results. After a long period of surplus, when India even failed to make use of the annual sterling releases made by Britain under the Colombo Plan, Indian balances in London have been falling. It is impossible to say how far other members of the sterling area have been making similar demands on London. Up till the end of June, at any rate, the balances of both the colonies and of the independent sterling area countries were still rising. This is the last date for which complete figures for each of the two groups are available. Since then, there has probably been an improvement in the external payment of Malaya, as a result of the recovery in the price of rubber.

On the other hand, the payments of the West African colonies may well have suffered as a result of the fall in cocoa prices and the smaller purchases of cocoa by the United States. Among the Dominions. only Ceylon is unmistakably adding to her sterling holdings; but the amounts involved here are on a much smaller scale than the opposite movements registered by Australia, New Zealand, or even India. ■

This evidence of some reduction in Britain’s liabilities to sterling area countries in recent months is not in itself necessarily a bad thing. After all, the total of these sterling area holdings in London has been rising, pretty steadily during the previous two years. It would be wholly unrealistic to expect the process of accretion to go on continuously for evermore. Indeed, the British Government itself has, as a matter of policy, and at the cost of some sacrifice in dollars, reduced its medium-term liabilities with the International Monetary Fund and the European Payments Union in the last few months.

The principle of lightening the books as part of the approach to convertibility, does not cease to apply because the liabilities are owed to fellow members of the sterling area. The ideal would be, of course, if the extra spending abroad, which is one of the factors responsible for the recent fall in some of the balances, were all done on British exports. But in practice the deterioration in the external payments of any individual member cannot be confined strictly within the sterling area group. There is inevitably in a situation such as the present, where export earnings have declined and imports have risen, some increase in the net expenditure of non-sterling currency. And this has probably been one of the contributory factors to the recent pressure on sterling ;n foreign exchange markets.

Australia's overseas funds fell from a seak of £542,900,000 in March to £4x6,300,000 early in December. New Zealand's net overseas assets declined rom a record of £’39,200,000 in June to i 87,400,000 last month.

SHARE MARKET INDICES

OVERSEAS STOCK EXCHANGES SYDNEY Share prices steadied on the Sydney Stock Exchange yesterday as the downward trend was halted. Leaders recovered some of yesterday’s losses. Sales.—Commercial Bank of Sydney, £2O 16s; Bank of New South Wales, £3B ss; Tooheys, 28s; Tooths, 86s 6d; Associated News, 22s 6d; Amalgamated Wireless, 435; A. Hordern, 30s; A.C.1., 465; Australasian Paper, 20s 7id; Bradford, 425; Broken Hill Proprietary, 40s 9d; Colonial Sugar £4O 10s; Drug Houses, 335; Dunlop, o4s 6d; Felt and Textiles, 31s; Goldsbrough, Mort. 425; Henry Jones, 52s 6d; Mort’s Dock, 20s 6d; Winchcombe. Carson, Ils 9d; Woolworths, 18s 4Jd; Yarra Falls. J6s 3d; Bulolo, 545; New Guinea Gold, 2s 3d; Mount Lyell, 20s 4Jd; Consolidated Zinc, 55s 6d; New Broken Hill, 50s 6d; South Broken Hill, 70s 6d; Ampol Petroleum, 20s 3d; Oil Search, 15s 6d; Associated Freney, 8s 6d; North Australian Development, 16s 10jd; Uranium Develop - ; ment, 13s 6d. MELBOURNE Turnover was heavier in selected Investment stocks at Melbourne yesterday, but prices w’ere again slightly weaker. Uranium was -more active, but prices moved variably. .Oil, gold, and silver-lead appeared easier. Sales.—Consolidated Zinc, 55s 6d; Mount Lyell, 20s 4d; North Broken Hill, 90s; Uranium Development, 13s 4d; Uranium Mines, 6s; Mount Morgan, 24b 3d; Oil

Search, 16s; Commercial Bank, 20s 8d; Goldsbrough, 41s 9d; Carlton Brewery, 38s 9d; Huddart Parker, pref., 235; A.W.A., 42s 6d; Associated Pulp, 25s 3d, and 5s paid, 8s; A.C.1., 46s 3d. and pref., 31s; A.P.M., 20s 6d, and pref., 20s 8d; Bradford Cotton, 42s 3d; British Tobacco, 345; Broken Hill Proprietary, 40s 4d; Courtaulds, 17s 6d; Drug Houses, 32s 9d; Dunlop. 34s 2d; Electro. Zinc, 335, and pref., 358 3d; Felt and Textiles, 31s; General Motors, pref., 235; G. J. Coles, 19s; Gordon and Gotch, 19s 6d; Henry Jones, 535; Herald, 18s sd; 1.1.1., A., N.Z., pref. 20s 3d; Myer, 14s; Olympic, 8s lQd; Woolworths, 18s 3d. LONDON Mining.—Consolidated Zinc, 45s 6d; New Broken Hill, 40s 6d; New Guinea Gold, Is 9d. LONDON SECURITIES (N.Z. Press Association—Copyright) LONDON, January 11. Except where indicated as the middle price between buyers’ and sellers’ quotations, the latest sale prices of securities of Dominion interest on the London Stock

STUD SHEEP SALE

TOP PRICE OF 1150 GUINEAS (New Zealand Press Association) PALMERSTON NORTH, Jan. 11. There was only desultory bidding at the stud sheep sale in Feilding today for a large number of the Southdown rams coming forward. Only 116 out of the 176 listed to come forward were sold by the auctioneer. These averaged 229.8 guineas. The highest price paid was 1150 guineas for a strongly-built ram from the stud H. J. Andrew, Maheno, Oamaru, one of the strongest .vendors and buyers during the day. The Andrew sheep sold exceptionally well compared with other lines, averaging 793 guineas for the first run lot.

In the first run 89 rams brought 19.880 guineas, to average 245.4 guineas. The second run, considerably smaller, averaged 1P3.8 guineas for a total of 35 sold to make 6785 guineas. Altogether 26,665 guineas were paid by purchasers from ail over New Zealand.

GREASY WOOL PRICES

N.Z. AVERAGE OF 48D FOR SIX MONTHS (New Zealand Association) WEIXJNGTON, January 12. The average price for greasy wools sold at auction in New Zealand in the six months ending December 31 was 48d per lb compared with 5Ud for the corresponding period in 1953, according to a stetement released by the New Zealand Wool Commission today. During the period 375,600 bales were sold compared with 351,600 for the corresponding time in the previous season. The grand total of returns from these sales was down to £24,754,100 compared with £24,948,500 realised in the 1953 period. Although the average price per lb is down by 61 per cent, the additional 24,000 bales offering brought the returns to within £194,000 of the figure for the previous season. The additional offerings of wool before Christmas this season do not whoHy represent increased production of wool, but in large part the offering of growers’ clips earlier than was the case in the previous season. “The increase in production of wool for the season is expected to be about 2 per cent.,” says the Wool Commission’s statement. AUCKLAND WOOL SALE OFFERING (New Zealand Press Association)’ 9 AUCKLAND, January 12. Catalogues for the third wool sale in Auckland this season closed today. About 30,000 bales will be offered at this sale on March 21. The stores are how accepting wool for the May sale. Next Monday and Wednesday 45,000 bales will be auctioned at the second sale of the season.

MEAT MARKET FIRM

CHILLED BEEF PRICES RISE

The Smithfield meat market was firm last week, says a report from the New Zealand Meat Producers Board. Light pitchings of chilled beef came forward and trading was good at rising prices. New Zealand hinds made up to 28d per lb, the highest since September last. Argentine hinds sold at 32d. Frozen beef was also firmer with better inquiry. Home-killed beef supplies were scarce, and prices were dearer, says the report. Light offerings of home-killed mutton and lamb sold firmly, the demand being met ty increased pitchings of imported supplies which sold at late rates. Comparative Smithfield wholesale prices over the last three sales are:—

CEYLON TEA SALES (N.Z. Press Association—Copyright) COLOMBO. Jan. 12. Offerings totalled 6,742,9721 b at the tea sale this week. Demand was strong and general. Quotations: high-grown broken orange Sekoe, 353 cents per lb; medium liquorig broken orange pekoe, 332 cents; medium' liquoring orange pekoe 345 cents; low medium broken orange pekoe, 327 cents; low medium dust, 335 cents.

Comparative indices are:— New York:--Dow Jones (1926 equals 100): Shares Rails Indus. sold □ctober 29 117.69 352.14 1,900,000 Nov. 30 . 131.47 386.77 3,440,000 Dec. 31 . 145.86 404.39 3,840,000 an. 5 . 142.56 397.24, 4,640,000 Jan. 6 . 140.31 391.89 5,300,000 an. 7 . 144.34 395.60 4,030,000 Jan. 10 . 146.23 400.89 4,300,000 Jan. 11 . 144.98 400.25 3,680,000 London.—Financial Times: Inds. ord. (1936 equals 100); Govt and gold (1929 equals 100):— Indus, ord. Govt. Gold □ct. 20 .. 180.7 105.98 95.79 NOV. 30 .. 177.7 105.10 93.63 Dec. 31 .. 184.0 103.33 95.90 Jan. 5 .. 186.6 103.82 96.54 Jan. 6 .. 187.3 103.85 96.01 Jan. 7 .. 188.5 103.94 95.10 Jan. 10 .. 191.3 103.51 93.87 Jan. 11 .. 191.4 103.06 93.24

Exchange are:— Jan. 11. Jan. 4. A.N.Z. Bank .. 1 17 6 1 16 3 Coml. Bank Aust. 0 16 3 0 16 3 E., S., and A. Bank 6 17 6 6 7 6 Bank N.S.W. .. 31 10 0 *31 5 0 British Tobacco ..*163 163 Golds.. Mort .. 1119 1 12 6 Dalgetys .. 0 10 6 0 10 6 Dalgetys, 4 p.c. .. 97 0 0 *97 0 0 Loan and Merc. 4 p.c. .. .. 83 0 0 *84 0 0 Loan and Merc., ord. .. 17 3 *17 6 P. and O. Def. ..*3 3 9 *3 3 9 Natl. Bank N.Z. ..5 5 0 — • Middle Price.

Dec. 17 d to d Dec. 24 d to d Jan 7 d to d Chilled BeefArg. hinds 30 28 31 29 32 Arg. fores 17 18 12 16 171 20 N.Z. hinds — 21 26 27 28 N.Z. fores — 12 14 16 17 Frozen BeefArg. hinds — — 22 24J Arg. fores — — 17 18J N.Z. hinds — — 21 23 N.Z. fores — 16 17 Aus. hinds — 20 23 Mutton— N.Z. wethers — 11 16 11 20 N.Z. Ewes 7 10 7 10 7i 11 Lamb— English and Scotch 28 34 24 34 31 37 N.Z. 24 32 23 31 28 30 Aust. 221 27J 22 27 21 27 S. Amer. 18 25 18 24 18 24 Pork— English 22 30 16 28 19 26 N.Z. 18 20 18 20 — Old season’s New Zealand Iamb sold from 22J d to 27Jd. rhe prices quoted above are for new season’s supplies.