BUSINESS ACTIVITY

Otago Daily Times, Issue 22714, 29 October 1935, Page 9

BUSINESS ACTIVITY

ON UP GRADE IN BRITAIN EXPANSION OVER WIDE FRONT (United Press Association) (By Electric Telegraph—Copyright) LONDON, October 26. The past week on the Stock Exchange has been a satisfactory one in every respect. All markets responded to the improvement in the international outlook and to speeches by Mr Baldwin and the Foreign Secretary, which are regarded as indicating removal of the shadow of possibility of war. Another favourable point is the belief that the ground is being prepared for the League negotiations before sanctions are applied. Gilt-edged securities, which of all stocks must be susceptible to international politics, naturally led the recovery, dominion stocks sharing the improvement. Industrial, rubber and mining shares followed, and there was great activity in most directions, the number of dealings recorded on the official lists on Thursday exceeding 10,000. Business activity in Britain is on the up grade, the latest evidence revealing, as the Economist's trade supplement points out, an expansion over a wide front. Moreover, a set-back in the near future seems unlikely unless the dispute between Italy and the League ends in international disaster. Activity in capital and equipment industries, especially building, is still expanding, and sales to consumers of goods at Home are also gradually making headway. One cloud, however, on the horizon is the decision of the Mine Workers' Federation to hold a ballot on a national stoppage. The butter market experienced a sharp Ret-back after steadily mounting to the highest level of prices for more than five years. The cause of the reaction is chiefly sales by speculators, who 10 days ago apparently thought prices had gone high enough and began to unload the stocks they had bought comparatively cheaply. Prices fell Is or 2s last week. The decline continued this week, and by Wednesday Australian and New Zealand were selling at 112 s and 114 s, a fall of 15s from the highest touched. Although this was due chiefly to profittaking sales, another contributory factor was the advance in the retail price to Is 3d and Is 4d per lb, which had an immediate effect on sales. One leading importer estimates that this caused consumption to decline by at least 40,000 boxes a week, many people switching over to margarine, as they always do when the butter price exceeds Is Id or Is 2d. Now that wholesale quotations have fallen, shopkeepers will be able to revert to this level, and it is generally expected that consumption will revive. The market closed steadier yesterday, with choicest New Zealand 112 s I to 114 s, exceptional 116 s, Australian 112 s to 114 s, and traders expect values to be maintained at about this level till supplies from the southern hemisphere increase. The statistical position re--1 mains very strong. Cold stores show a further reduction at 693,901 boxes, which is barely a fortnight's normal consumption, and imports of Continental butters declined considerably, as Germany is buying large quantities of Danish as the result of a new agreement between the two countries. Germany is also taking a considerable amount of Dutch, Latvian and Siberian butter.