LONDON TRADE REVIEW.

New Zealand Herald, Volume LVIII, Issue 17794, 30 May 1921, Page 7

LONDON TRADE REVIEW.

MOEE HOPEFUL SIGNS.

WOOL INDUSTRY REVIVES.

AWAITING COAL SETTLEMENT. By Telegraph—Press Association—Copyright. (Received 9.30 p.m.) A. and N.Z LONDON, May 38. Business on the Stock Exchange has been decidedly dull under the influence of tho coal strike, and persistent selling by Paris, but it closed with a better tone all round, on the more hopeful prospects that the conference called by the Government will lead to a settlement of the coal

strike and the cessation of French selling. Another factor tending to the improvement is the closing of the conversion loan. The latest estimate is that about onethird, or' £632,000.000 has been converted-. With this out of the way, the brokers are hoping to see an improved demand for gilt edged securities, which lately have been somewhat neglected owing to the competition with the concession loan.

A feature of the Stock Exchange is a pronouinced activity in promoting circles, which commenced with the reduction of

the bank rate and if, as is expected, a further reduction follcw better news regarding the coal strike, plenty of new

capital issues will be placed on the market, mostly fixed interest securities, which are in more favour than speculative or semi-speculative investments, as investors nowadays seem to prefer the safety of their principal rather than a high interest yield.

The Foreign Exchange market had an exciting week with sensational movements. The slump in the pound sterling to 3.89 dollars is attributed in some quarters to the action of the Reparations Commission in arranging to transfer huge sums by Germany to the Allies without thinking how the transfers should be made, and what effect there would be on the money market. Then the commission announced that it would receive payment in dollars alone, causing heavy purchases of dollars by Germany and Holland, and completely upsetting the market. Other authorities attribute the fall to speculators .who were responsible for the rise of the pound sterling, now reversing their action.

A better feeling is apparent throughout the wool industry, principally due to the strength of the primary markets, and though much textile machinery in Bradford is idle, many firms have received offers of business, which would warrant them, running full time if they could obtain fuel. Meantime, topmakers' quotations remain firm, with a fair amount of business. Stocks are low owing to recent shipments to America, and restricted production ; the reports of successful sales in Australia, New Zealand, and at Antwerp giving the market a confidient tone. The prospects of the London sales are hopeful.

The Economist attributes the recovery of non-ferrous metal prices in a measure to the fact that the worst prices touched were well below the cost of production. The greatest factor in the rally is the reduction of the output. A large part of the recent buying of copper in London has been on account of Germany and Japan, although there have also been considerable speculative purchases in anticipation of an extensive demand following a settlement of the coal strike. The drop in the price of tin has caused the closing of every Cornish producer, and the restriction of operations in Northern Nigeria. The latest reports state that the principal Nigerian companies are now able to produce below the current market thanks* to economic working and Government concessions in regard to rent and royalties. _