LOAN OPERATIONS

Manawatu Standard, Volume LIII, Issue 6, 5 December 1932, Page 7

LOAN OPERATIONS

TRIUMPHANT CONCLUSION. RECORD TURNOVER. MARKET NOT DISTURBED. (United Press Association—By Electric Telegraph.—Copyright.) Received December 5, 8.50 a.m. LONDON, Dec. 3. The conversion loan was brought to a triumphant conclusion on December 1 when a turnover of more than £600,000,000, the largest amount recorded on any market, was completed without disturbance despite the war debt uncertainties and the exchange complications. The expected increase in the market supplies of credit has not materialised as the authorities have been for many weeks purchasing unconverted war loan, testifying to the care and skill wherewith the entiro conversions were planned. The war debts overshadowed the markets. The gilt-edged movements were unusually wide, but there was not the slightest evidence that confidence was affected. The City is admittedly more concerned in honouring its obligations to America than the economic consequences thereof. GILT-EDGED SECURITIES.

The recover}' of gilt-edged securities significantly followed inspired reports that Britain would pay if America insists. The fall in sterling was out of proportion to the actual business transacted. There was no evidence of a flight from fixed interest securities owing to inflation fears. On the contrary, the trend of industrials is downward. The worst feature of the decline in sterling has been the destruction of the cohesion of the sterling bloc. Scandinavian, South America and other currencies linked to sterling appreciated. Sterling’s decline was also a powerful stimulant in deflation of gold prices.

Most commodities have fallen durtlie week. Meat and wool are notable exceptions, but wheat touched a new low record.

AN GLO-PERSIAN NEGOTIATIONS. The Anglo-Persian negotiations are likely to be protracted and difficult. The company’s royalty is Persia's chief source of revenue, yet it fluctuated like a fever chart during 10 years ranging from £1,410,000 to £130,000. The Persian dissatisfaction is increased by the decline in sterling, involving heavy losses in Persia’s balances kept in London as a currency reserve. Persia wants terms similar to Iraq where the Government is assured of a minimum annual royalty even though the oilfields are not developed.

A cable message relating to the oil agreement appeal's on page 5.