MONEY AND MARKETS
GILT-EDGED TRANSACTIONS PHENOMENAL RECOVERY BUTTER PRICES HARDENING (United Press Association.) (By Electric Telegraph—Copyright.) LONDON, July 9. The sensational rise in gilt-edged stocks last Friday week, following the announcement of the war loan conversion, has continued, with an occasional check, and the satisfactory result of the Lausanne Conference has given the Stock Exchange a further incentive to strength. In the middle of this week prices showed a slight setback owing to profit-taking, but later the bulls again came on the scene, and to-day’s prices were the highest recorded. The recovery of the gilt-edged market is almost phenomenal. Thus 2i per cent. Consuls are now quoted at 73i, compared with 49i, last year's lowest, and the conversion loan is 98|, compared with 67. As one financial writer says, the announcement of conversion might be likened to a charge of dynamite, for in most departments prices have been blown sky-high. Among the stocks which show a great recovery are Australian and New Zealand issues, which are now in such demand that brokers have great difficulty in securing them. This is not surprising, as some show yields exceeding 6 per cent., while, British funds are now on a3J per cent, basis. As the Investors’ Chronicle points out, the war loan conversion proposals proved a veritable god-send to the Australian Commonwealth. Several stocks have risen to par or a small premium, so that the apprehensions regarding Australia’s ability to provide redemption for those issues by means of conversion offers have been removed. Moreover, if anything favourable comes from Lausanne and Ottawa, it is only, reasonable to expect an improvement in the prices of primary products, which would also favourably influence Australian and New Zealand economic and financial conditions.
Other departments of the Stock Exchange are also active at much improved prices, partly owing to the national credit having been raised to a higher basis. Among shares showing improvement are . Australian banks, which have been under a, cloud for a long time, but are now attracting the attention of investors, owing to the probability of better results which are likely to follow the improvement in Australian companies, and the hardening of wool prices is expected to have a good effect on pastoral companies. Although supplies of apples this week amounted to 347,000 boxes, compared with 553,000 previously, and only 195,000 are due next week, there is no improvement in the market. We are receiving large supplies of soft fruits, though a considerable portion of the strawberries is being taken by Jammakers, and the duties are reducing the quantities from the Continent, otherwise the apple position would have been even worse. Commenting on the position, a large importer says that there is no doubt that the quantities of Australian apples have been too heavy, but the indifferent condition and quality of the fruit are the' real causes of the present extremely low values. There is general complaint concerning the quality of Tasmanian apples —especially in the latter half of the season—which have not been up to normal. Pears make a pleasant contrast. They are fetching excellent prices—up to 24s a 1 bushel—and the quality and condition of most shipments leave little to be desired.
The butter market is at last showing signs of recovery. Buyers appear to be more confident, and prices for all descriptions are steadily hardening. The production in Denmark and Europe generally is declining, and it is presumed that the statistical outlook will improve, especially as at the present low prices consumption in the United Kingdom is exceptionally good. Cheese also shows a more hopeful position. Prices for New Zealand and Australian have improved la to 2s, and with a spell of warm weather the consumption has much increased, and is likely to become still greater.
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Bibliographic details
Otago Daily Times, Issue 21694, 12 July 1932, Page 7
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625MONEY AND MARKETS Otago Daily Times, Issue 21694, 12 July 1932, Page 7
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