REVIEW OF THE MARKETS.

New Zealand Herald, Volume LVIII, Issue 17700, 8 February 1921, Page 5

REVIEW OF THE MARKETS.

RETURN OF CHEERFULNESS. ] WOOL PRICES STEADYING. BUTTER BUYERS NERYOU.S. By Telegraph—Press Association—Copyright. A- and N.Z. LONDON. Feb. 6. The announcement by Mr. Austen Chamberlain, Chancellor of the Exchequer, j that the excess profits duty will not be imposed in the case of new companies, j ■ has given intense satisfaction on the, Stock Exchange, and imparted a cheerful i j feeling to the markets because it removes ; the feeling of uncertainty which has been ■ prevalent for the past six months- The general decline in the value of shares during that period was not so much due to 1 pressure to sell as to the absence of in- J I terest on the part of the public owing to j j the unsettled outlook, which counter- i i acted the lowness of the prices. j i The removal of the excess profits duty j I should have a tonic effect on the invest-, 1 ing public and canse a resumption of the , buying of industrial stocks owing to the 1 expected improvement in trade which i is likely to follow the removal, especially jas no other tax will be substituted. But j until that improvement does come no adI vance in value can be expected. On the' 1 other hand, the announcement that no j other tax will be substituted for the ex- •' cess profits duty will probably have an adverse effect on some of the gilt-edged stocks which are available for the payI ment of death duties, notably the Victory . Bonds, which have declined slightly. Other investment stocks like Colonial j loans may also feel the competition of industrial shares. The money market is rather easier, but much money is going into the Exchequer, and there is little prospect of permanent j ease until the end of the Government's financial year on March 31. In the meantime there is less talk about the reduction of the foank rate, but the advocates of such a reduction have not yet abandoned hope. The Bradford wool market shows a good demand for fine tops. There is a good doa! of inquiry from the United States, hut this is mainly of a speculative character, :in anticipation of the proposed United States tariff against imported | wools, which, if passed, will come into j force next March. The home trade is j very quiet, the large stocks of piece goods I being still the obstacle. The hostility to j the Realisation Association for dealing j with Australian surplus wool is diminishI ing somewhat, but the trade is keenly j watching operations. The general feeling ! is that prices are becoming stable about the present basis, which is considered about the bottom. A readjustment of the retail prices is now urgently needed to restore public buying confidence. Freights continue to decline, and owners are competing keenly for the small j amount of business that is offering. j The reduction of the price of butter sold. under Government control is causing a better demand, especially as some of the I shops are retailing at 2s lOd and 2s lid I a pound in order to increase j but the statistical position is making buyers generally nervous and indisposed to enter into commitments ahead. The Ar- j gentina and South Africa are offering butter at 180s to 200s c.i.f. The Danes are very dissatisfied that the British Government's price has been reduced to 2265, and threaten to stop shipments, but there is little fear of this, as other countries are unable to purchase freely. : There is a better tone on the metal markets since Mr. Chamberlain's announcement. Copper is firm on reports of negotiations, m the United States for a loan to finance surplus copper in the hands of producers. If the loan succeeds it is likely the prices will rally temporarily. Tin is unsettled owing to uncertainty regarding the action of the Straits Settlements Government. Heavy sales in the middle of the week were followed by bear covering, which caused a rise on Friday. Spelter remains steady. Reports of a further curtailment of production in the United j States has had no effect here. Germans j j are offering to sell for shipment till April. Apparently they are anxious to dispose I of as much as possible before the 12 per cent, export duty, proposed by the Allies, comes into force.