STERLING GAINS ON LONDON MARKET

Press, Volume CIV, Issue 30847, 4 September 1965, Page 20

STERLING GAINS ON LONDON MARKET

(N.Z.P.A.-Reuter—Copyright) LONDON, September 2. Sterling gained strength on the London market today with the news that Britain’s gold and currency reserves fell less than expected in August.

The reserves fell by £24m in August to £923m—exactly the same level as a year ago—compared with £som in July. Sterling rose from 2.79 and one sixteenth to 2.79 and three thiry-second dollars on the news. Financial observers pointed out that the holiday season and the dating for repayment of official long-term debts traditionally made August one of the less favourable months for the reserves. Moreover, the £24m drop included £l4m in interGovernment debts, of which £lom was understood to be a European payments union debt to West Germany, and £4m payment to Portugal.

Without these, the loss on the month would have been only £lom—plus whatever recourse was made to Britain’s 750 m dollar “swap” facilities with the New York Federal Reserve Bank. Most of the August loss was made in the first few days of the month, partly in reaction to disclosure of the July figures. Government Buying

The Government had to use its reserves to buy sterling in order to prevent the price falling too much. But by mid-August, publication of July’s good balance of trade figures had eased the

pressure on sterling, and the demand for gold also eased. The Government did not, as had been feared, have to start tapping its reservoir of dollar securities. Official circles hinted today that the balance of payments figures for the second quarter of 1965, due to be published later this month, would show a further improvement. This would again tend to strengthen sterling and improve the gold and currency reserve prospects.

Tolley Plans Public Issue

(N.Z. Press Association) WELLINGTON, Sept. 3. The old-established Wellington electrical engineering firm of Tolley and Son, Ltd., is to make a public issue and seek official Stock Exchange listing. The issue of an unstated number of 10s shares will be made at a premium of Is 6d a share.

The Issuing brokers, Messrs Harcourt, Longuet and Company, have stated that application will be made for official listing and they expect the prospectus to be available on September 24.