MONEY AND MARKETS

Otago Daily Times, Issue 21645, 16 May 1932, Page 7

MONEY AND MARKETS

RECOVERY ON STOCK EXCHANGE * GILT-EDGED STOCKS ACTIVE SATISFACTORY APPLE SEASON (United Press Association.) (By Electric Telegraph—Copyright.) LONDON,'May 14. (Received May 15, at 5.5 p.m.) The Stock Exchange has shown a wonderful recovery during the past fortnight, and closed yesterday in a most cheerful frame of mind. The principal activity has been in the' gilt-edged section, in which, according to one financial writer, both as regards the volume of business and the sharpness of the rise in prices, there has been no movement of equal magnitude for many a year, if, indeed, at any other time in the history of the Stock Exchange. This activity is chiefly due to cheap money, but the market was also greatly influenced by Mr Chamberlain’s speech on Tuesday, followed by a reduction of the bank rate to 2J per cent. There has been an enormous-transfer of money from short-dated securities and deposits to long-dated stocks, and it is estimated by competent authorities that the daily turnover of British funds this week reached the almost incredible amount of £30,000,000. Australian stocks have shown great appreciation both in price and in the number of dealings. They were steadily hardening till yesterday, when Mr Lang’s downfall caused an almost meteoric rise in many of them. The reduction in the bank- rate was immediately followed by an announcement by the joint stock banks that interest on deposits at short notice would be reduced to per cerit. Such a low rate has not been in iprce since 1897, when the bank, rate was 2 per cent. So far the banks have made no announcement regarding a reduction in the rates for loans to traders and overdrafts. There seems doubt whether they will lower the charges. The question is engaging the attention of members of Parliament. When the House reassembles on May 23 Mr Chamberlain will be asked to use his influence with the banks to secure a reduction in the rates of interest on overdrafts and charges generally in order to ensure, if possible, that trade and industry will benefit from the cheaper money rates. The outstanding feature yesterday was the cheap terms on which the 'Government placed its three months Treasury bills, of which £30,000,000 was allotted at an average rate of a shade over 19s ,6d per .cent. These are believed to be the lowest terms on record, as these hills replaced £27,000,000 sold on February 12 at 4| per cent. It will readily be seen how monetary conditions have improved. There is now talk of the probable early conversion of the 5 per cent, war loan, though it is doubtful whether the Government will tackle the huge task of converting the whole amount of £2,086,000,000. It is suggested in some quarters that the Government may favour piecemeal conversion, commencing with £500,000,000.

The Australian and New Zealand apple season is almost half over, and the results so far are generally regarded as quite satisfactory. All the steamers have landed their fruit in good condition, the only complaints being about immaturity in some of the earliest shipments and the prevalence of bitter pit, especially in Cox’s Orange Pippins. The prices have hardened during the past two weeks. Sellers hope to be able to maintain them at about the present level until the strawberry season begins. The firmness of Australian and New Zealand apples is partly due to the fact that the arrival of Californians has been comparatively small and few Newtowns are available. Lately, however, there have been fair supplies of .Washington Wine Saps, which are realising about 12s per case—a Very good price considering that they are eight months old. One noticeable feature of the trade is that Tasmanian apples are fetching higher prices compared with the mainland fruit than is usually the case. -•The pear trade has .been exceptionally good, Tasmanian mainland and New Zealand all meeting with good demand at satisfactory prices.