LONDON CONVERSION

New Zealand Herald, Volume LXXIII, Issue 22403, 27 April 1936, Page 7

LONDON CONVERSION

NEW ZEALAND LOAN £6,000,000 TO BE OFFERED (Received April 26, 5.5 p.m.) LONDON, April 25 it is expected that New Zealand shortly will launch a £6,000,000 conversion loan at 3 per cent for 20 to 25 years at a trifle below par to replace 6 per cent inscribed stock, of which the Government is likely to give notice of redemption a few days hence. The exact amount of C per cent stock concerning which conversion operations are foreshadowed is £5,869,989 and its term is 1936-51. The fact that it would become available this year was mentioned in the last Budget. This will be the fourth New Zealand conversion operation undertaken since 1933. In that year £5,000,000 of 5 per cent bonds were converted into 3£ per cent stock at £97. The next year, 1934, saw £3,989,100 of 4 per cent stock converted into 3J per cent stock at par. Last year £10,135,800 of 5 per cent stock, 1935-45, was dealt with. New Zealand resources to the extent of £2,135,800 were utilised for the repayment of that amount of the loan. The remaining £8,000,000 was converted into 3 per cent stock, 1952-55, the issue price being £9B 10s. The venture was an immediate success. Cash applications amounted to £10,148,000, while a majority of the holders of the old loan applied for conversion into the new stock. At the issue price the return to the investor was £3 2s Id per cent, with redemption of the discount included. Expenses counted, the cost of the issue over the whole period was stated to be about £3 4s 8d per cent. The saving by this transaction, with exchange allowed, was £219,000 per annum, the whole saving in interest by all the conversions being some £300,000 a year. Following the option which becomes available this year, no London loans of any moment offer for conversion until 1939, when £17,173,000, finally maturing in 1940, may be dealt with. WOOL INDUSTRY MARKED RECOVERY BUYERS CROWD YORKSHIRE (Received April 26, 5.5 p.m.) LONDON, April 25 The Daily Telegraph paints a vivid picture of the recovery in the wool industry. It says the mills are working at full pressure All the principal hotels in Yorkshire are filled with buyers, including many from overseas. All are most satisfied that the Argentine is resuming purchases of luxury cloths. On the other hand the Roubaix and Tourcoing districts, France, are hard hit by the growth of import restrictions/Local circles declare that the export trade has fallen to a critical extent. Many mills are closed. TRADE AND FINANCE ' POSITION IN BRITAIN EFFECTS OF THE BUDGET (Received April 26, 5.5 p.m.^ LONDON, April 25 The London Stock Exchange's reception of the Chancellor's Budget was bitter disappointment. Almost as surprising as the Budget itself was the fact that liquidation, which most jobbers expected, did not materialise, and the precautionary lowering of prices proved unnecessary. The gilt-edged section is the only one where the effects of the increases in taxation are still lingering. Opinions remain optimistic in view of encouraging trade reports and the prospect of a prolonged period of cheap money. The commodity markets have been little affected bv the Budget with the exception of tea, the consumption of the cheaper grades of which is expected to increase. The Economist's review records an expansion of business activity, though it is still below the December peak. It lays stress on the uneven incidence of recovery. For instance, the iron and steel industries cannot'cope with orders, but the coal and cotton industries are stagnant.' GOLD AND SILVER QUOTATIONS IN LONDON (Received April 26, 5.5 p.m.) • LONDON, April 25 Fine gold is quoted to-day at £7 0s lid an oz., compared with £7 0s yesterday, and £7 Is osd on Thursday. Silver was quoted yesterday at 20 7-16 d an oz.. spot, and forward, compared with 20gd, both positions on Thursday. The quotation for silver at per fine oz. yesterday was 22d, compared with 21$ d on Thursday. The following is a summary of the fluctuation in the price per ounce of fine gold this year:— £ s d Highest price, January 2.. 7 14 Lowest price, Feb- 4 and 10 7 0 6 April 20 7 0 10 April 21 7 0 9) April, 22 7 0 11 April 2.1 7 1 0) April 24 . . .. ..7 0 11$ April 25 7 0 11 DEMAND FOR GOLD BRITISH AUTHORITIES (Received April 26, 5.5 p.m.) LONDON, April 25 The Daily Mail's City editor says he anticipates a general rise in gold shares. He bases his belief on the fact that the authorities are steadily accumulating gold, as the Bank of England's returns give evidence that similar movements are occurring abroad owing to rising national expenditure. COTTON, RUBBER, COPRA, ETC. (Received April 26, 5.5 p.m.) LONDON. April 25 (Quotations on April 18 in parentheses) Cotton. —Spot, 6.62 d (6.14 d) a lb.; Mav delivery, 6.26 d (6.18 d). ihibber.—Para, 9d (9d), a lb.; plantation and smoked, 7 9-16 d (7|d). Jute. —April-May shinments, £l9 Is 3d (£lB 12s) n ton. Hemp.—Quiet Copra.—May-Juno shipments, South Sea, sun-dried, £l2 2s 6d to London and Rotterdam (£l2 17s 6d April-May) a ton; South Sea, smoked, £ll 17s 6d to Mars-eilles and Genoa .(£l2 ss); plantation, Rabaul, hot-air dried, £l3 to liOiidon and Rotterdam (£l3 15s % Linseed Oil—£2B 15s (£2B 15s) a ton. Turpentine.—4ls 3d (41s) a cwt. BRITISH TREASURY BILLS (Received April 26. 5.5 p.m.) British Wireless RUGBY. April 25 The total amount applied for this week in tenders for £45,000,000 worth of Treasury bills was £76.860,000. The average rate per cent for bills at three months was 10s 6.27 d against 10s 6.85 d a week ago.