BRITISH COMMERCE

Evening Star, Issue 22277, 2 March 1936, Page 12

BRITISH COMMERCE

MOST SECURITIES WEAKENED EFFECTS OF TOKIO OUTRAGES PROMISING OUTLOOK FOR INDUSTRY Press Association—By Telegraph—Copyright LONDON, February 29; The Japanese outrages found the markets already vulnerable, and a wave of profit-taking weakened most securities before news from Tokio arrived to make investors still more cautious about increasing them commitments. Japanese bonds declined up to three points. Chinese issues were also affected owing to the uninviting prospects in Mongolia and elsewhere. armaments. Mr Baldwin’s hint not to permit excessive profits in armament and aircraft shares ended an orgy of speculation in these stocks. INDUSTRIALS. Industrial stocks generally have been affected by Courtauld’s disappointing report as to a reduction of profits in their major industry, which had achieved a handsome increase in production. 'This proved a shock to the city. Nevertheless there is a strong undercurrent of optimism on the longterm prospects of industry. The Board of Trade indices of industrial activity showed notable increases, especially in respect of the manufacturing index of 1935, rising to 116.9, compared with 108.5 for the previous year, the highest production recorded since the index was first compiled in 1927. Similarly the index for the December quarter of 1935 represents the greatest production of any quarter about which information is available. The ‘ Economist * records a decline in imports of raw materials, largely due to the hectic restocking at the end of 1935. It adds; Most countries experienced a measure of recovery, which is reflected in the index of world industrial production, which had risen to 113.2 in November, 1935, compared with 95.4 in November, 1934. Business activity, however, continues to deteriorate in Germany, contrasting with France and Scandinavian and a majority of the Central European countries. There are no signs of improvement in Belgium and Holland. Sir Josiah Stamp, at the annual meeting of the London, Midland, and Scottish Railway Company, described the, prospects of maintaining and even improving British industry as hopeful, provided building activity was continued. WHEAT. Commodity markets are devoid of interest. Business in Australian wheat is desultory and requirements seem satisfied. The damage to the New Zealand crop opens the possibility of a better demand for Australian, hut the quantity required is unlikely materially to affect the international position, which has slightly improved on further adverse Europe-American crop reports. BUTTER. The butter market remains puzzling, with an extreme discrepancy between the prices of Australian and New Zealand and Continental descriptions, which is unreasonable. North of England, however, still imsists on Danish butter, which at present is in short supply. Although Australian and New Zealand butter is steadily gaining a stronger foothold,- traders are hopeful that the present high price of Danish will help to destroy the widespread prejudice. The statistical position of the market remains sound, although stocks in cold store, slightly increased in January, should be considerably reduced by the end of March with dominion arrivals in the next few n eeks below current requirements.