TRADE AND FINANCE

Manawatu Standard, Volume XLV, Issue 288, 9 November 1925, Page 5

TRADE AND FINANCE

REMOVAL OF LOAN EMBARGO.

MIXED EFFECT ON STOCK EXCHANGE.

. LONDON, Nov. 7. The removal of restrictions on foreign and Dominion borrowings has produced a rather mixed effect on the Stock Exchange, the gilt-edged group being depressed all round in view of the probability of the early issue of a number of new loans which will divert investment funds from existing channels, while industrials are showing firmness. The activity is based on the fact that foreign and Dominion borrowers will spend a considerable portion of the loans in this country. This hope, which ought to be realised if we believe such an authority as the Federation of British. Industries, has caused general improvement in what are known as heavy industrial shares (like iron, coal and steel) and the improvement has spread to other industrials. It is announced that all of the new Gold Coast loan of £4,500,000, except what is required to pay local labour, wili bo spent iu this country; but even this satisfactory feature has not secured the loan an enthusiastic welcome, for its price is regarded as too high. Allowing for redemption the yield to investors is only 4| per cent, and this does not compare favourably with similar existing securities.

METAL MARKETS.

The metal markets have been somewhat adversely affected by the political crises in. France and Germany and the further depreciation of the franc has made French buyers extremely cautions, but business with the United States leaves nothing to be desired, according to a report issued by a leading firm of metal brokers. It is generally admitted that the present activity of the stock market in New York reflects satisfactory conditions in most branches of the trade, and in view of the great accumulation of wealth there is no reason why activity should not be maintained. Reports from the United States indicate a consumptive demand fully sufficient to deal with supplies of copper, lead and spelter. Only in .regard to tin is a tone of scepticism expressed and this happens to be the only metal America does not produce and must import. American writers have for a long time preached to consumers that the value of tin is too high and is susceptible to a sudden break as has happened in the past. Consumers, accordingly, have only followed the advance in prices when they have been forced to do so and have limited their purchases to near requirements. The intrinsic position of tin is perhaps stronger than any other metal, for the experience of last year teaches that even the extraordinary lucrative price obtained by the producers has not resulted in an increase of supplies sufficient to fill the new world’s consumptive demand.

WOOL OUTLOOK ENCOURAGING

The reports of the Bradford wool trade are distinctly encouraging and the demand has been so good that the market has been cleared of several qualities and top-makers are unable to accept new orders for delivery this year. One of the best features of the present situation is that the machinery is better employed than at any time since the late slump. A Bradford correspondent writes: “Manufacturers have booked some very good orders both at Home and for export during the last month. Many now have sufficient work in hand to keep the looms employed till after the turn of the year. The main difficulty is to induce buyers to pay prices in keeping with replacement costs. Undoubtedly many merchants are hoping for easier prices early next year, but the general impression at. the moment is that values will bo maintained till the end of 1925.”

Conditions in the spinning section show a marked improvement, and whereas a few weeks ago spinners experienced great difficulty in keeping machinery running, several are now working overtime in order to cope with urgent demands for delivery. The sudden spurt of activity also found the hosiery trade unprepared and manufacturers are being pressed for delivery of goods which might and ought to have been ordered long ago.

TRADE POSITION IMPROVED. Summarising the trade position Barclay’s Bank Review says: “The progress made at Locarno should enable expenditure on armaments to be reduced and enable more attention to be devoted to financial and economic reconstruction and development which would considerably facilitate trade expansion. A favourable European harvest gives a prospect of an abundant supply of foodstuffs and many classes of raw materials are at lower prices than in recent years. This should exert a beneficial influence and a broadening demand, while more active steps by several countries to stabilise currencies should further assist. It is true a number of more important industries are still in an unsatisfactory position, but greater activity in 'the engineering trade is evidence that in some directions, at least, progress is being achieved.”—A. and N.Z. cable.