TRADE AND FINANCE

Otago Daily Times, Issue 19965, 6 December 1926, Page 9

TRADE AND FINANCE

LONDON STOCK EXCHANGE. A PERIOD OF DULLNESS. BRIGHTER TONE OF WOOL MARKET. (Frees Association—Bv Telegraph LONDON, December 4. (Received Dec. 5, at 5.5 p.m.) The three weeks proceeding Christmas are usually a dull time on the Stock Exchange, and this year is likely to prove no exception, especially as there are several adverse factors disturbing the markets. The cheif of these is the Chinese situation, which has caused all Chinese bonds to fall heavily. Other factors are the fluctuations of the franc, the fall in the price of rubber, and even the conclusion of the coal strike has not had the effect that was expected. Commenting on the subject, a- well informed financial writer says: “It is not altogether strange that the settlement of the coal dispute should have been followed not by a revival, but rather by a general reaction in most sections of the Stock Exchange. As is often the case, many speculators bought on the strength of a prospective agreement, and have taken advantage of its realisation by securing whatever profits accrued. Moreover, the cost of the dispute, which has previously been overlooked, is now being reflected in the reports of the industrial companies, while fears are entertained that it may be necessary either to increase the income tax or to place extra duties on luxury goods. The present reaction is made to appear loss surprising when it is borne in mind that the trend of prices during the most costly dispute in the country’s history has throughout been remarkably steady.” The writer proceeds to compare the current prices of 27 representative stocks with those ruling on April 13. The comparison shows that the only weak section in industrial securities has been textiles, which have been affected by independent factors. “Investors, therefore, have to congratulate themselves on the manner in which the markets have emerged from the strike.” Another financial expert says: “While it remains to be seen whether there will be a revival of cheerfulness after the final settlement has been concluded at all events there is nothing in the present stagnation of the markets as a whole to indicate any kind of adverse anticipation of the prospects for 1927.” WOOL PROSPECTS IMPROVED. The London wool sales are proceeding excellently. Competition is good. The Home trade is buying freely, and Germany is operating actively. Even France, which is handicapped by the exchange, is taking a small quantity. A Bradford correspondent writes; “The feeling here is decidedly hopeful. Operations are showing signs of expansion, and generally there are sound grounds for an optimistic tone and the more cheerful atmosphere which is noticeable on the exchange. Events are considered to be moving in the right direction. The fact cannot be overlooked that there is sufficient competition to prevent any weakening in the raw material values of Australia, New Zealand, and London.” THE BUTTER TRADE. The butter position continues to improve. Thanks largely to the resumption of work in the coal mines buying has increased greatly in the industrial centres, and retailers are also filling their needs for, the Christmas markets. Consequently, there has been a satisfactory reduction in stored stocks, and prospects seem to be favourable for a continuance of strong markets. News of the drought in New South Wales and Queensland is also having a considerable effect, and some buyers are reported to be operating in anticipation of short supplies early in 1927. The multiple shops are raising the retail price of colonial from Is 5d to Is 7d next week, but it is not expected that the advance will have any effect ou consumption. NON-FERROUS METALS. In the non-ferrous metals markets, as on the Stock Exchange, the advent of peace' in the coal industry has not had the favourable effect which might have been expected. One metal broker writes: “The happy change in the coal situation has chanced to coincide with very subdued reports of trade on the Continent, and buying here on a general scale is unlikely till work can be resumed without restriction. Therefore, we must be prepared for a quiet time this side of Christmas.” —A. and N.Z. Cable.