LONDON MONEY

Evening Post, Volume CIV, Issue 147, 19 December 1927, Page 12

LONDON MONEY

LIKELY TO CHEAPEN

DOMINIONS' BORROWINGS

(United Press Association.—Copyright.) (Received 19th December, D a.m.) : . : LONDON, 17th December. The London Stock Exchange is ending the year in a most satisfactory manner, for considerable animation prevails in most of the markets, with gilt-edged securities leading the way. Activity in these securities has been more notable of late than for a long time'past. Prices have improved all round, and all recent new issues show strength. The unexpected appearance of the New South Wales State loan of £7,000,000 gave only a temporary check to the market, and its reception was favourable. As one financial writer says, "It is significant ■that' the underwriting of this loan was easily arranged, as it was evident that those accepting the responsibility believe that, even if they left with a portion, it will not be necessary to nurse the scrip for long." In thjg connection it may be pointed out that within the last two months Dominions and British Government loans amounting to £33,000,000. have been issued in London. Some, like the Commonwealth loan, were left largely in underwriters' hands; others were fully subscribed; but with only one exception, all these issues are now being quoted at a premium. Commenting on this state of affairs one of the leading London stock brokers said, "There is plenty of money here for the Dominions." Many new is.wes are talked about as likely to come before the public at New Year, but Australia's wants seem to be satisfied for the present. There is not likely to be any difficulty in placing them, •for it is generally expected that money will be cheaper soon after the year is turned. Some rather acid comment comes from the "Investor's Chronicle," which points out that the New South Wales loan brings Australia's borrowing during the current year to nearly £57,750,000, of wjiich £35,----000,000 represents new money. Australia's imports for the year ended 30th June exceeded exports by £20,000,000 sterling. This is largely a reflection of overseas borrowing. This excess of imports "gives cause for concern. Another consequence of overborrowing is that' prices and wages are inflated. Large imports, owing to the tariff, have greatly augmented the Customs Tevenue, and this has enabled direct taxation to be reduced. This causes some to think that Australia is more prosperous than the facts would justify.