“KEEP YOUR STOCKS”

Evening Star, Issue 22636, 30 April 1937, Page 9

“KEEP YOUR STOCKS”

ADVICE TO INVESTORS MARKETS BOUND TO IMPROVE Press Association —By Telegraph—Copyright LONDON, April 29. In an article tinder the headings of “ Board of Trade Statistics Show the Biggest Jump ” and “ Retail Sales Record,” the ‘Daily Mail’ tersely advises investors to keep their stocks. The article says: “ While President Roosevelt and Mr Chamberlain can claim the doubtful honour of starting the present malaise, the technical character of it cannot be overemphasised. The initial declines placed a severe burden on the market. The machinery had a snowball effect, forcing operators to turn their saleable stock into cash in order to meet obligations which they had incurred on other markets, while even those who came out unscathed were reluctant to assume fresh commitments; thus depriving the markets of their normal cushions. Such a major slide cannot pass without effecting short term economic activity. The bug of healthiness is a long term outlook, which is indubitable.” The ‘ Financial News ’ expresses the firm conviction that new peaks of activity and prosperity will be reached in the next two or three years, a view with which responsible men in the city and industrialists concur. It is hoped that meanwhile politicians will spare the delicate mechanism of finances from further shocks and will do their best to restore the shaken confidence, BEYOND ALL REASON FEARS OF SLUMP UNFOUNDED. LONDON, April 29. President Roosevelt’s slogan for 1933, “ The only thing wo have to fear is fear itself,” is peculiarly applicable to the present state of the markets, which deteriorated beyond reason and opened weaker, after the worst day of the year. The present atmosphere is such that any rumour, too, will gain credence. Investors, who have taken fright, are leaying their money in the banks. They are even, turning their shares into cash at a loss, and are asking whether the present setback, which must have reduced the market capitalisation of securities hy £1,000,000,000, is not a prelude to a new slump. Such fears are based on the failure to grasp the elements of the situation. One of the most experienced stockbrokers told the Associated Press that the city could not have a slump with a 2 per centum bank rate, a £100,000,000 defence loan, and a constant stream of excellent company reports and trade statistics. “It simply does not make sense,” commented the stockbroker. “ The Stock Exchange cannot indefinitely languish while industry is humming. The reaction may be both sudden and rapid.” Mr R. G. Casey (Australian Treasurer), interviewed by the Associated Press, expressed a similar view, adding that when the rearmament money begins to talk it will talk loudly. NEED FOR HOME PRODUCTION ENCOURAGEMENT OF RESEARCH. LONDON, April 29. (Received April 30, at 8 a.m.) Sir Harry M'Gowan, at Imperial Chemicals’ annual meeting, declared that, with the widespread tendency towards rising commodity prices and rearmament, there was no reason to anticipate a. decline in activity in 1937, but while there was no fear that the volume of home trade would diminish, it was difficult to contemplate the export markets with equal confidence. Economic nationalism was restricting foreign trade, while some dominions, notably Australia and New Zealand l , with greater homo production of foodstuffs and a stationary population, might have reached the maximum export of primary produce. Britain might, therefore, have to produce goods that she now bought out of England. Industry should therefore encourage research, improve efficiency, and strenuously endeavour to maintain foreign trade. MARKETS STILL GLOOMY LONDON, April 29. (Received April 30, at 2 p.m.) A late, but only partial, rally relieved the gloom of yesterday’s markets, which continued an alarming course. A batch of excellent company reports in the ‘ Trade News ’ was ignored by nervous operators. Gold shares were the worst sufferers, some being only half recent values.