MONEY AND MARKETS

Otago Daily Times, Issue 21599, 21 March 1932, Page 7

MONEY AND MARKETS

STOCK EXCHANGE BUOYANT EFFECT OF LOWER BANK RATE BUTTER PRICES STILL LOW (United Press Association.) (By Electric, Telegraph—Copyright.) ' LONDON, March 19. {Received March 20, at 5.5 p.m.) There could be no better indication of the strength of the Stock Exchange than the way the markets stood up to the shock of the death of Mr Ivan Kreuger, the head of what the Statist calls the world’s greatest industrial undertaking, whose stocks had stood at one time for all that was safest among international speculative issues. Indeed, the effect was much less than might hav§ been anticipated, and, though some international stocks were depressed at first, the recovery was well under way when the markets received another shock, this time a pleasant one, in the shape of the unexpected reduction in the bank rate. This had an immediate effect, and an outburst of buoyancy swept over all markets, especially gilt-edgeds, and when the reduction was followed by easy s conditions of the money market and revenue returns, showing that a small Budget surplus was probable, substantial rises occurred, Among the stocks which benefited are Australians, which previously were 1 steadily recovering, and now show firmness all round. The reduction in the bank rate is regarded as being made with a view to helping the Government’s conversion scheme, though its success was assured beforehand, as it is understood that about £100,000,000 of maturing 4$ per cent. Treasury bonds are held by public departments. ' Although butter prices continue low some satisfaction is found in the fact that the consumptive demand is strong not only in Britain but in three or four European countries, which have been buying freely. This has enabled importers to clear away very heavy arrivals. The total imports during the past three months show an increase over the same .months of last year of 289,000 cwt, and no less than 517,000 over 1930, yet the consumption has been so good that our cold storage stocks at the beginning of March were only 46,000 cwt in excess of those at the same time last year, and 121,500 cwt less than in 1930. The demand for Australian and New Zealand butters has, been

stimulated by their cheapness, aided by many shopkeepers who are pushing Em- ! pire goods. The best New Zealand butters are retailing at stores at Is 2d and Is 4d per lb, and Australian at Is and Is 2d. The Australian fruit season opened with the arrival of the Narkunda and Jervis Bay, bringing' pears and grapes. Unfortunately they did not come on a good market, as the South African season is at its height, arid large supplies are being landed, not only of pears and grapes, but of plums, peaches, and nectarines. . The total shipments already advised from South Africa amount to 1,598,000 packages. These are arriving in splendid condition, and thanks to the comparatively short sea journey show very little waste. Consequently Australian fruits have met very strong competition, and prices so far realised for '■pears are only about 11s a bushel.