MARKETS AGAIN WEAK.

New Zealand Herald, Volume LXVII, Issue 20600, 26 June 1930, Page 9

MARKETS AGAIN WEAK.

AUSTRALIAN' CONDITIONS. EFFECT OF NEW LOCAL LOAN, FALL IN COMMODITY PRICES. [fbom otra oww coßSESßOsrosirr.] MELBOURNE, June 18. A particularly heavy" tone ' per--, meated Stock Exchange markets since last week with the. result that in numerous instances prices are now quoted ss low, or lower, than, the lowest points reached early last month in the depth of the depression. Following bountiful r r&ins in early May and a steady influence in tha wool market, coupled with the resumption of work on the Newcastle coalfields, a temporary buoyant note wa§ manifest nt - financial circles. However, there have been more serious economic factors prevailing in Australia to combat the above favourable influences, and in well-informed financial circles a further downward trend is no surprise. Some critics have stated that the decision of the Loan Council to offer 6 per cent, for the £10,000,000 requited by th« States and Commonwealth has been a contributing factor to higher money rates, but the principal factor has been a scarcity of available funds. When the Prime Minister of the Commonwealth makes such statements as "I must tell you. frankly that the success of the new £10,000,000 Commonwealth loan is a matter of national importance," and "our present financial difficulties are almost unparalleled .in Australia's history," it i 3 no wonder that the community in general is beginning to take stock of Australia's position. 0 Over 6 Per Cent, on Bonds.

While the rate offered for the new money is undoubtedly attractive, it will be no mean task for the Government „to secure a full "subscription for the loan. Money is tigLer than when the March conversion loan was floated, and though the latter loan wa3 heralded as a great success, on that, occasion. new cash subscriptions totalled less than £8,000,000. The markftt for existing Commonwealth loans since last week has undergone a drastic readjustment. The average return over the market is now approximately 6 per cent., while those issues maturing in the next five years return, on an average 6£ per cent.

Unfortunately for Australia, there appears to be no respite in the fall in tha world's markets for primary products, while metal quotations have continued to. fall daily. has "broken tha dollar" in America, and the state of tha wool -market may be ganged when it is stated that the average price realised throughout Australian centres during May for greasy wool was 11.01 d per lb. and £l3 3s 6d a bale. These prices are certainly better than were prevailing in, March last, but nevertheless are not profitable prices for a vast majority of wool growers in Australia. In the past week, electrolytic copper has fallen £5 10s a ton, and lead, spelter and tin have also been quoted at lower levels. Silver has also been sold at newlow levels since records were kept. English Investors Selling.

The overseas market is unfortunately even more adverse to Australia than- a week- ago. Commonwealth 5 per cent. 1945-75 loan has been sold down to £B7 7s 6d, a cumulative decline of I2s fei per cent. - The experience of one of Melbourne's leading financial houses has been that English investors have shown, a quickening desire to liquidate Australian securities, both Governmental and industrial, in spite of tha Eact that the adverse exchange rate reduces the effective price secured on the Australian market for securities listed here. Tha prospect of the various Governments balancing their budgets next year is beginning to become a most contentions point. The Federal Government contemplates imposing further taxation and further restriction of imports. In adopting these practices, however,, there is a distinct danger that the Govepament will have to face a substantial reduction by the people in the consumption of commodities imported, while . the same factors will apply should excise duties be raised on locally-produced products- Tha future is undoubtedly still fnll of difficulties, and, until the country as a whole resolutely faces the position, little relief can be expected from the current depression.