LONDON COMMERCIAL SUMMARY

Dominion, Volume 22, Issue 35, 5 November 1928, Page 11

LONDON COMMERCIAL SUMMARY

4 INTERESTING BANKING INNOVATION REACTION AGAINST SPECULTIVE SHARES THE FREE RUBBER MARKET (United Press Association.—By Electric Telegraph.—Copyright. 1 (Australian Press Association.) (Rec. November 4, 5.5 p.m.) London, November 3. A change came over the Stock Exchange during last week, the plethora of new issues having proved more than speculators could digest. A reaction in these speculative industrials was inevitable after such a prolonged upward movement, and it is consequently not surprising that there has been considerable liquidation, notably of shilling shares. There has been nothing like a panic, but many of these • new shares have fallen sharply and numerous speculators who thought they were making easy money by buying them have had a salutary lesson. But while speculative stocks have been having a bad time, gilt-edgeds have been holding their own fairly well, and though business in them has been small, quotations have moved within narrow limits, aud the war loan closed strong. Colonials have generally been quietly steady, and though the City of Sydney loan met with such poor support and dealings in it opened at seven-eighths discount, the underwriters are not perturbed, for as one financial newspaper points out, the stock is likely to be readily absorbed as gilt-edged. The market is short of stock at attractive buying prices. Free Rubber Market I The end of the Stevenson rubber restriction scheme has not so far had any effect on the market, and the best-informed people do not anticipate that it will cause any serious fall, for it will be remembered that prices declined sharply when the Government announced the abandonment of the scheme on April 4, so that the effect of removing Ihe restriction has been discounted. There has been some anxiety regarding stocks which have accumulated in Malaya which are variously estimated at between 75,000 and well over 100,000 tons of raw rubber, which it was feared might be thrown on the market all at once, but it is now believed that there is no danger of this. Industrial Outlook. In the quarterly trade forecast, the Federation of British Industries states that the outlook continues unsettled, but with the prospect of au improvement in the New Year. The federation adds: “There are many indications that the Bank of England may soon be in a sufficiently strong position to exercise something approaching its pre-war freedom of action, thus making the actions of the New York Federal Reserve Bank of less consequence. Unless there is an abnormally drastic restriction of credit in America, there is no reason why the New Year should not see a considerable easing of our internal monetary problem, accompanied even by a reduction of the bank rate.” Interesting Banking Innovation. The Scottish Joint Stock Banks contemplate an interesting innovation which is likely to encourage thrift amongst the humblest classes of the population. The proposal is to open deposit accounts for any sum from a shilling upwards, allowing the usual savings bank interest of two and a half per cent. Hitherto the banks have not opened deposit accounts for less than due pound. The course now proposed will open the door of the Scottish banks to a large new class of depositor previously barred unless he were resolute enough to save up piecemeal his first pound. The joint stock banks will thus be in competition with the post office savings bank and similar institutions. Tea Statistics. The report of the Indian Tea Association for 1927-28 contains interesting statistics which show that tea-drinking is still on the increase in this country, the average consumption per head of population in 1927 reaching the highest figure yet attained, just over nine pounds, almost double the figure for JBSO and nearly eight times that for 1840, the year when statistics of tea were first kept. The increase seems confined to tea alone among beverages, since the figures of coffee and cocoa have been comparatively stationary since 1920, and in both cases are less to-day than in 1918.