A GOOD SIGN

Dominion, Volume 9, Issue 2796, 14 June 1916, Page 4

A GOOD SIGN

The London Stock Exchange is composed of some of the smartest anjl keenest business men in the world, and their sources of information are quite amazing. A political disturbance or a commercial crisis in any part of the world is frequently forecasted as well as being immediately reflected in the movement of prices in this financial centre. The stocks listed on the London Stock Exchange cover practically every part of the globe, consequently the members' information covers a wide geographical field. If bad news depresses stocks, so also does good news cause a rise. Now and again, indeed, it may be said very frequently, the members play at "bulls" and "bears," and prices rise or fall for apparently no reason whatever. The war, of course, had a tremendous influence on Stock Exchange values. Thoso who can recall the early days of August, 19 M, will remember ' that the Stock Exchange had to bo closcd for some time to prevent a complete dislocation of values, and when the Exchange was reopened certain restrictions were placed on members, and minimum prices were fixed for certain groups of stocks, below which dealings were not permitted. This embargo was maintained in respect to Imperial Consols and Colonial Government securities until about the middle of November last. On November 17 the quotation for Imperial Consols under the embargo was £65, and a week later, when the embargo had been lifted, the price dropped to £58 10s. Since then the price has remained about this level, the variation seldom exceeding 2s. 6d. either way. Recently an improvement has been noticed. During lasif month Imperial Consols were higher by 155., and war loans by about 255. But these advances are small compared with what has taken place during the past,week. This is set.forth-in the table appended: June 7. June 12. Rise. £s. d. <£ s. d. s. d. 2i-% Imp. Consols SD 5 0 61 7 G 2 2 G 3>i% war loan 88 12 G 90 5 0 112 G it/o war loan 95 15 0 9G 12 6' 017 G Such advances do not occur on'the London Stock Exchange without very _ substantial reasons. This "bullish" movement obviously indicates something favourable, and that it is connected with the progress of the war ■ may be taken for granted. The very shrewd gentlemen of the Stock Exchange have no doubt seen in. the naval battle in the North Sea and in the. failure of the German offensive against Verdun, and more recently the evidence of the strength of Russia as disclosed in tho recent great drive, not only sure signs of the waning chances of tho enemy, but a very hopeful outlook for the Allies. It may be that in financial circles in London they know more than we do of these events, and certainly they know more of internal conditions m Germany and the financial position there. The somewhat sensational rise in British gilt-edged securities may therefore be taken to indicate foi\ the Allies good prospects ahead. '