MARKET ANXIETY

New Zealand Herald, Volume LXXIV, Issue 22719, 4 May 1937, Page 11

MARKET ANXIETY

SIGNS OP IMPROVEMENT SLOW RECOVERY POSSIBLE CONDITIONS IN INDUSTRY By Telegraph—Press Association —Copyright LONDON, May 2 Already there are signs that the markets will be more 'sober next week. Liquidation has spent itself, but it is unwise to prophesy. Thursday's settlement is awaited with some anxiety, as heavy differences must be met. If it passes without trouble it will open the way to slow recovery on a broad front. Investors are now nibbling at bargains which in more normal times would have been considered too good to miss. The financial press is advising cautious purchases, laying stress upon tho attractiveness of certain industrial shares, and forecasting a sharp recovery in rubbers, of which dealers are short of stock. The Economist says it considers that Mr. Neville Chamberlain, Chancellor of the Exchequer, undoubtedly is right in stating that the effects of the profits tax are exaggerated. Nevertheless, normal conditions are impossible until tax uncertainties are cleared up. The present quotations for many sound shares are the result of fear rather than a careful weighing of investment factors. The scope for a further all-round increase in the earnings of industry on the scale of the past four j'ears, however, is becoming narrower.

Rearmament Orders Danger Costs are rising and labour is restive. The opportunities of increasing profits from some developing industries still exist, but it will not be surprising if the major rise in equities is past. One result of the present heart searching has been to focus attention on the importance of maintaining Britain's export trade. There is a growing feeling that manufacturers should not allow rearmament orders to lead industry Into disequilibrium and draw off productive activity from the export trades on which Britain's prosperity rests. The movement in favour of the revision of the Ottawa agreements is increasing. Even the Government is realising the importance of widening the area of world trade and lowering tariff barriers to encourage foreign countries to buy more British exports.

Butter Quiet But Wool Strong Commodities have suffered from heavy selling, but withstood it reasonably well. The Financial News says it considers that the long-term trend in commodities should definitely be upward, though henceforth it will be more selective. The strength of wool especially is notable. If Russian competition develops next week prices should go still higher. Butter is quiet with a rather difficult market, but Tooley Street interests do not anticipate a break in prices. The supplies of fresh apples appear to be inadequate to meet the strong demand. Prices are firm and the situation is likely to continue, as buyers are short of stocks..