VALUES DOWN

New Zealand Times, Volume LII, Issue 12076, 2 March 1925, Page 8

VALUES DOWN

LONDON STOCK EXCHANGE MARKET DISORGANISED BY RISE j IN BANK RATES. COLONIAL STOCKS AFFECTED. By Telegraph.—Press Assn.—Copyright Australian and N.Z. Cable Association. ißeceived March 1,, 11.5 p.m.) LONDON. February 28. For ten days the Stock Exchange showed'a spirit of quiet optimism which was reflected in the steady improvement in the prices of British? fjilids and other gilt-edgeds. There was apparently plenty of money available for invest, ment, a fact illustrated by the successful Queensland loan, and by some other 1 new issues. But yesterday the markets received a rude shock owing to the disorganisation of the money market, following on the advance of the New York rediscount rate, and the Bank of England’s very necessary defensive action in raising its 1 rate for advances to 54 per cent. The effect of this, hardening of money' was immediately reflected on the Stock Exchange, and there was a general collapse of gilt-edgeds, notably the British Conversion loan, which previously had been showing remarkable strength. This loan, of which the Americans are reported to hold a large amount, fell off one and three-eighths., Other British funds also declined materially, a considerable amount of stock- being offered Colonial stocks, which have been very firm lately, were also affected, and Queensland scrip, which was quoted early in the'week at fifteen-sixteenths premium, fell to one-half discount. A feature on the Stock Exchange early in the week was the issue of £3,100,000 -of 4i per cent, stock, under the Trade Facilities Act, on behalf of three industrial conoerns at 964. The price proved far too high for the investing public, and the underwriters had to take 80 per cent., with the result that the stock is now quoted at 1J discount. ' \ RISE OF 1 PER GENT. Reuter’s Telegram. (Received March I, 11.45 p.m:) LONDON. March 1. The money market was disorganised by the action of the Federal Reserve Bank at New York in raising the rediscount rate to 84 per cent. The Bank of England raised the rate for weekly advances by 1 per cent.. This caused a similar advance .in all discount rates, and Treasury bills were placed at an average of 4 11-16, compared- with 8 11-16 per cent, last week. It is generally expected that the bank rate will be raised next week-, consequently the Stock Exchange is unsettled, and prices are mostly lower.