COMMODITY MARKETS AND TRADE.

Manawatu Standard, Volume LVI, Issue 304, 21 November 1936, Page 4

COMMODITY MARKETS AND TRADE.

THE INVESTMENT MARKET. (By "Penloo.") The share market is inclined to quietness and this will become more pronounced during the next three or four weeks. There need be no significance attached to this, for it is seasonal. With the Chnstmas holidays approaching the thoughts of investors, like those of other people, turn towards holiday making and travel, and investments are forgotten for the time being. Moreover, investors are prone to put off investing until the New Year to see how things shape, and that is very necessary in these rapidly changing times. But prices are not likely to ease, nor is there likely to be anv great change in tlie investment trend. The gilt-edged class of securities_ is not so popular as it was because industrial shares are more profitable, and there is always the probability of capital appreciation. Prices of industrial shares are probably higher than the circumstances warrant because of a limited field for speculation. The position in New Zealand, in this respect, is acute, and if it were not for the facilities offered of investing in Australian companies values here would be extremely high. The New Zealand position is due of course to the fact that the Stock Exchange offers the only channel for investment since mortgage investments have been closed. New companies with potential prospects are needed, but to float a new company in New Zealand would be a hazardous undertaking because of the uncertain outlook and the lack of confidence. In Australia a few new companies have been floated but their shares will not have a value for some time to come. Popular shares are those of the chain stores, which seem capable of earning larae profits and paying handsome dividends.

THE WOOL MARKET

Next Saturday the. wool sales in the I Dpminion begin with the opening sale at Auckland. Owing to the inclement weather experienced throughout the Dominion shearing has been unduly delayed, consequently the catalogues at the opening sales at all centres will be limited. - If catalogues are small, we may be sure that prices will he high. At the London sales which opened on Tuesday evening there was, as expected, a sharp rise in all classes of wool, crossbmls moving up 15 per cent, compared with the closing rates of the September series. The position in the Dominion will appear better than that because the comparison will be with the closing rates realised at the sales held in March and April last. The advance in New Zealand should, there-

fore, be about 20 per cent. We have this advantage over London that besides representatives from Bradford and the Continent, we can look for Japanese buyers and probably American also. The latter must come into the market, for the drought experienced this year and last year caused great mortality in the flocks. Moreover, there has been substantial economic recovery, the political situation is back to normal and there is increasing confidence. Of course nothing is to be expected from Germany, which country is very short of foreign exchange and must buy sparingly if she buys at all. But with Japan and possibly America competing for our wool, prices should be extraordinarily good. The wool cheques this season should be substantially larger than those of last year, and the money will be wanted, for sheep farmers have greater costs to face besides heavy taxation. Whatever of our other primary products may fail us, we can make sure of wool pulling us through.

GERMAN WOOL POSITION.

'there appears to be considerable improvement in the textile trade in Germany. Prices for raw and semimanufactured wool have advanced slightly but remain above the equivalent foreign value, in consequence of thq shortage of supplies. However, the rigid system of price control prevents any undue advance by regulating the demand and keeping prices from boom-

ing. But it would be short-sighted to under-rate the remarkable progress made in the manufacture and production of synthetic fibres. The difficulty of obtaining adequate sterling exchange has' been of inestimable help to the Zeehvblle industry by strengthening individual finance, and research on a large scale has been made possible, and the purchase of up-to-date machinery possible to the smaller industrial concerns. The first experimental stage having been passed, extensive new plant is being erected, and the German Dye Trust is very active in its object of overcoming all difficulties connected with the satisfactory production of viscose, cuprariia, and aceta. Never-' theless, although? the comparative position reached of Zeelwolle and sheep's wool are somewhat similar to that of rayon and pure silk during theh\ original contest for supremacy, • it is asserted by German authorities that sheep's wool fabrics will enjoy preference over the artificial providing the' relative price factor can be kept well balanced. On the other hand, any pronounced divergency of values cannot but seriously affect the further turn-over of the contending article.