SECURITIES MARKET

Evening Post, Volume CV, Issue 90, 16 April 1923, Page 7

SECURITIES MARKET

INVESTMENTS IN DEMAND

AMERICAN EXCHANGE POSITION,

(BNITW MESS .ASSOCIATION.—COMMSHT.) WtimUAN - JJEtr ZEAIANB CAJIE ASSOCIATIONS (Received'l6th April, 10 a.m.) '.' LONDON, 14th April, The outstanding feature /of the. Stock Exchange is the strength of gilt-edged securities',, some of which have established new records. Notable among these is the 5 per cent. War Loan,, which reached £103 ss, a rise- of no less than £5 since October.- British .Government stocks, Corporation stocks, colonial Government's, Indian xaile, and all other securities of the kind show advances, and the demand exceeds the supply. . '. One factor responsible for the strength of the British funije is the rumour that the Budget may contain some provision for a further conversion loan, while confident hope is expressed that^the income tax will be reduced. The latter has ac-. centuated the' demand for good securities., -: ' "■ . . " ■.

The reaction in sterling exchange ... on New York has caused same anxiety. A financial writer in " The Spectator " says the relapse is not surprising,.. for there is every reason to believe that the recent advavce in sterling was .largely stimulated by special transactions,, such, as the American purchases of British securities at a low level, 1 operators-obt-aining a double profii both by reason of the rise in securities and .the movement in exchange. It may be doubted if the recent rise was entirely justified by the economic conditions as between the two countries. Quite apart from the great trade balance in its favour, the United Stated has lent £4,000,000,000 sterling to foreign countries within thr6e years, which should give her a further control over the exchanges.

Other financial writers suggest that the break is due to selling of sterling to America to pay for the foreign bonds bought in' New York by British investors.

[The chief points of interest in th» above dispatch are the sharp rise in th© prices of gilt-edged stocks; the possibility of 'an early reduction in incometax; and the decline in sterling in New York. With respect to- the rate of exchange", the "'£. was worth' 4. 41| dollars in New York a year ago. It rose sharply in February last till it touched 4.72— its nearest to par for some years. Then it slipped back again until it was quoted in "The Post" on Saturday last at 4.65£] . ;