FOREIGN LOANS

Dominion, Volume 19, Issue 88, 8 January 1926, Page 9

FOREIGN LOANS

EAGERLY SNAPPED UP IN LONDON

EFFECT OF REMOVAL OF EMBARGO DANGER OF OVER-LENDING Two large foreign loans have been snapped up eagerly in London. Now that the embargo has been removed, business is expected to return to normal this year, but the “Financial News” emphasises the dangers of over-lending. By Telegraph.— P-Ess Association Copyright. (Rec. January 7, 8.25 p.m.) London, January 7. Two large foreign loans have been snapped up most eagerly. One million sterling of Hungarian Land Mortgage Institute 7| per cent, bonds, issued at 93 vesterdav, were over-subscribed within an hour to-day. The- list for four millions’ worth of 7| per cent. San Paulo Coffee Institute bonds, issued at 9-1, closed in a few minutes, after scenes resembling a football scrimmage. Several other large foreign flotations are imminent.

The "Financial News” says:—“Now that the embargo has ceased naturally it is expected that business during 1926 will return to the normal volume. It would be hasty to assume, however, that foreign Government issues will reach the volume of 1924, when they amounted to £40,619-000. Over-lending would immediately be reflected by the weakening of the sterling exchange, necessitating the stiffening of the bank rate as a countercheck, for which the pace cannot be made too fast, whether the offerings be on Dominion or foreign account, and the margin available for overseas investment cannot be too far anticipated without risk of the underwriters being left with b’ blocks, at heavy cost to the borrowers.” The “Financial Times” says: “In the gilt-edged market the monetary position is still a cause for uneasiness. The prospect of heavy colonial and foreign borrowing in the early future is regarded with misgiving.”—Aus.-N.Z. Cable Assn.