Commerce, Mining, Finance

Evening Star, Issue 22890, 23 February 1938, Page 8

Commerce, Mining, Finance

Wool Supplies and Sales Uncertain Trend in British Industry London Markets Perplexed In. contradistinction to the recent trend, Wall Street is now providing a firming influence on London markets. The nervousness and perplexity which have caused -gilt-edged • securities to waver in that centre indicate another uninspiring account. City opinion dreads a. general election. New York markets were closed yesterday, due to a holiday. • A-.’ brighter trend operated on the local market this . morning, transtasman issues: advancing smartly. A rise in base-tnetal prices was reflected in Australian related stocks. The more extended inquiry ruling at recent auctions raises, stronger hopes that the Australian wool available for the year will be sold by the close of the season. A limited demand from America has latterly been experienced. At its present price wool is less subject to competition of artificial fibres, and after reviewing the position Winchcombe, Carson Ltd. conclude by saying that ‘ - the outlook is not without its gleams of brightness.” ■ j British industry during November and December shows a slight recession, states Lloyds Bank Ltd. Activity in the -heavy industries has been generally well maintained, and it is in the consumers’ goods industries that the recession is more noticeable.

THE SEARCH FOR GOLD REEFS NEAR QUEENSTOWN PROSPECTING TO START IN SPRING The prospecting of reefs in Macetown, Bullendaile, and Skippers by thoroughly-organised parties was discussed with the Minister of Mines (the :Hon. P. 0. Webb) during his visit to Queenstown by _ the Lake County Miners’ - Association. The Minister' the Southland ‘Times’) gave an assurance that prospecting would he carried out next spring. Mr W. H. Overton, chairman of the association, said that. when the Minister was in Queenstown last year he promised that this request would be fiven effect to, but so far very little ad been done. There was a firm belief among the miners that these reefs were well worth opening up, and to prove or disprove this theory it was asked that the country be thoroughly prospected, and so save investors in mining from probably throwing good money away. The Minister said he was surprised to know that prospecting had not been carried out to any extent, because after his last visit he had instructed his department to put men out. When he yisited Cromwell, however, he would go into the matter with the employment officer there. He was aware that a man had been sent out and had prospected the reefs in Shotover known as sainsburys,” and the results forwarded were poor. _ The Minister said he agreed with the association in proving the worth of the country, and it could rest assured that the prospecting would be carried out in a thoroughly-organised manner next spring. REPORTS AND RETURNS BULOLO DREDGING The following production report frcAn the.Bulolo Gold Dredging Company has been- received for the month of January:—The total gross production amounted to 15,096 ounces of bullion, containing 10,408 ounces of fine gold from 862,800 cubic yards. The estimated working profit was 7,845 ounces of fine gold. The above production is equivalent to £91,070, and working profit to £65,493, on the basis of £B' 15s (Australian) per fine ounce of gold. , The recently-completed No. 5 dredge Is working at considerably less than normal capacity and will continue so for several months, until a new driving motor is installed.

OUTLOOK FOR WOOL “ NOT WITHOUT BRIGHTNESS " NEED F9R ENCOURAGING BUYING The more extended inquiry ruling at recent auctions raises stronger hopes that the Australian wool available for the year , will be sold by the close of the season. In that respect the decrease in the South African clip should assist (state Winchcombe, Carson Ltd.). At December, the receipts of wool 4n that country were 70,000 bales below the 1937 total, and our Port Elizabeth correspondent in the month mentioned estimated that the African clip would be 20 per cent, less, or 168,000 hales. It is difficult to make accurate estimates of production, but it is certain that a heavy reduction in African supplies will be recorded. - 'A limited demand from America has latterly been experienced, and vessels leaving for that quarter have carried larger shipments of the sheep’s staple than earlier in the season. "Retail stocks of woollen goods in the United States are being gradually reduced, and eventually some j appreciable revival in mill activity must be seen to replenish depleted shelves. Prospects are not promising for a marked improvement in the demand for wool from the States, but even moderate buying on that account would he a valuable aid in lifting the balance of the clip. The most pressing need in Australia is to facilitate the purchasing of the sheep’s staple by countries whoso financial position and lack of reciprocal trade with the Commonwealth prevent them from securing the quantities of wool they would like to obtain. That problem transcends all others in importance Italy ,is a case in point. During the earlier selling months of this season she bought in good volume in Australia exports from July to December to Italian ports totalling 71,916 bales, compared with 45,173 hales in the similar period of 1936, and 6.672 hales in 1930. During the full 1932-33 and 1933-34 seasons, shipments from the Commonwealth to Italy were more than 200,000 bales each year. At its present price wool is less subject to competition of artificial fibres. An English authority states that a few months ago, when merinos and crossbreds were costing manufacturers decidedly higher figures than present rates, a good deal of interest was shown in substitutes as a cheapening element, but on to-day’s basis, apart from trouble experienced in manufacturing, substitutes are less attractive. In that connection it is interesting to note that the price _ of cotton, which was very low, has risen slightly. For some time the quotation for cotton in English currency was in the vicinity of 4jd per lb, compared with 8d last April. The latest price is slightly over' sd. Improvement In the price of cotton reduces its competitive ability with wool. The outlook is, therefore, not without its gleams of brightness. INDUSTRIAL BRITAIN SLIGHT BUSINESS RECESSION APPARENT IN CONSUMERS’ GOODS INDUSTRIES After making due allowance for the normal autumn expansion in business, culminating in trade, there is some evidence of a slight recession in England during the past two months, states the January review of Lloyds Bank Ltd. It is not serious, and activity in the heavy industries is. on the whole, well maintained. Still, here and there, new orders are not coming forward quite so freely, while the engineering trades are beginning to find it a little easier to obtain supplies of raw material. The recession is rather more noticeable in the consumers’ goods industries than in the capital goods industries. Both the cotton and wool textile trades were badly shaken by the autumn fall in prices, but during December there was some recovery in the woollen industry. Other industries, such as clothing, boots and shoes, and potteries report a slight falling off in business. Shipping freights have fallen heavily since the early autumn, and this is proving a deterrent to orders for new tonnage; but the movement of shipping .voll maintained.

INTEREST RATES The return to the investor on his outlay based upon the latest dividends, works out as follows on the latest sales. Exchange' is deducted in the case of Australian and added in the case of English stocks. When Government issues are included the calculation provides for redemption at maturity:— Per Cent. Per Annum.

HEW YORK SHARE INDEX DOW JONES AVERAGES

LONDON STOCK MARKETS HERVOUSHESS AND PERPLEXITY Press Association—By Telegraph—Copyright LONDON, February 22. (Received February 23 at 11 a.m.) Fortunately the firmness on Wall Street prevents the Cabinet crisis from seriously affecting the markets, but the nervousness and perplexity which caused gilt-edged securities to waver indicate another uninspiring account. City opinion is sharply divided, but all dread a General _ Election, for which reason the majority of City people are probably prepared to stand by the Premier, right or wrong. NOTES FOR INVESTORS BRITISH RELAXATION OH FOREIGN LENDING Far-reaching reactions will develop, firstly within the Empire, and secondly in what are known as “ creditworthy ” nations, following the relaxation of the “ control ” by the British Treasury on foreign lending. Although this relaxation has been decided upon, the position of sterling is sufficiently strong to enable it to withstand any additional strain in this direction without' risk. Furthermore, the voluntary system of co-operation now in force between Whitehall and the city is readily adaptable to changing circumstances. From the point of view of Australia, the question of raising a sterling loan, possibly for the purpose of financing the short-term debt in London, is brought measurably nearer, hut it is almost certain that the success of any such loan would be dependent upon a general restoration of confidence in financial circles. It is unlikely that early advantage will be taken of the loan until the present uncertain outlook is considerably clarified.—Melbourne ‘ Argus.' SINGE LAST APRIL Since April, 1937, American, industrial stocks have declined in price by 40 per cent., and English by 30 per cent. The fall in Australia is only about 10 per cent. AUSTRALIAN STOCK EXCHANGES Press Association l —By Telegraph—Copyright SYDNEY, February 22. Local investors to-day war© content to follow the lead of the London Exchange, where a cautious but calm attitude is being adopted following the British political situation. Price movements, therefore, were within narrow limits.

Bank of New Zealand £4 13 0 Commercial Bank £3 8 4 National Insurance £4 8 0 N.Z. Guarantee Corporation £6 9 7

Eailroads. Industrials. Turnover. Feb. 21 ... 29.35 129.49 760,000 Feb. 19 ... 28.76 127.50 290,000 Feb. 18 ... 28.66 126.29 770,000 Feb. 17 ... 29.30 127.59 860,000 Feb. 16 ... 28.71 124.90 470,000 Feb. IS ... 29.04 124.93 520,000 Feb. 14 ... 29.16 125.97 400,000 Feb. 11 ... 28.96 124.94 390,000 Feb. 10 ... 29.11 125.54 630,000 Fab. 9 ... 28.13 125.00 750,000 Feb. 8 ... 27.86 125.52 770,000 1938. Highest ... 32.33 134.35 Lowest ... 27.08 . 118,49 1937. Highest ... 64.86 194.40 Lowest ... 28.91 113.64

£ 5. d. Bank of New South' Wales 32 12 6 Commercial Banking of Sydney 20 3 0 Commercial Bank of Australia 0 16 10* Colonial Sugar ... 46 12 6 British Tobacco ... 2 9 6 Tooths 2 14 9 Tooheys 1 11 74 Australian Glass 4 14 0 Kandos 1 6 9 Cash Orders 0 16 74 Felt Textiles 1 16 3 Newbold Brick 1 14 0 Peters 2 15 3 United Provisions 0 6 0 Goldsbrough Mort 1 11 0 John M’Grath 2 0 0 Edwards Dunlop 2 7 0 Producers General 0 8 6 Standard Cement 0 19 3 Nestles (pref.) 1 17 0 Woolworths 1 7 3 Wunderlich 1 0 104 Mount Morgan ... 0 9 3 Mount Lyell 1 10 44 Broken Hill Pty. 3 2 0 North Brokens 2 10 0 Rawaiig 0 9 3 Larut 0 14 1 Emperor 0 11 7 MELBOURNE, February 22. The market is very dull. £ s. d. National Bank (£1C paid) 14 12 0 Dunlop Pordriau 1 3 1 Goldsbroucb Mort 1 11 0 Electrolytic Zinc 2 6 9 (pref.) 2 9 0 Broken Hill Pty. 3 2 0 Norths 2 9 9 Souths ... 1 13 74 Emperor 0 11 9 2 Loloma 0 19 6