TRADE SUMMARY

Otago Witness, Issue 3519, 23 August 1921, Page 14

TRADE SUMMARY

COX FIDEN CE RETURN IN G. GERMANY'S INDUSTRIAL BOOM. LONDON, August 20. The Stock Exchange has had a severe fit of depression during the last few days. The gilt-edged market is suffering from the unsatisfactory position of the national finances and the indefinite outlook of Irish affairs, and declines are apparent in most securities. One bright spot is the colonial corporation market, where a fair demand is apparent at late prices. Industrial shares have been influenced by the fact that many companies have either passed or reduced dividends, and consequently many shares are marked down. / A distinct weakness has developed whenever selling pressure is exercised. Oils have been particularly bad, and at one time a panic appeared likely owing to an avalanche of selling. There has been a sharp rebound from the lowest, but the market remains extremely nervous. The exchange position, so far as Australasia is concerned, shows little change. There seems no probability of the realisation of the fears entertained in many quarters that the autumn would see a recurrence of the serious stringency which marked the autumn of 1920. The banks, certainly, are not offering anything like their old time facilities; indeed, they are doing all they possibly can to discourage exports, except of necessities, but this ! policy is working well. The position is ' improving steadily and confidence is re'turning. This is greatly helped by the shipments of wheat, wool, and butter, which aro all realising good prices. If these are maintained it scorns that there "ill be no difficulty in weathering the awkward autumn period which caused so 1 much anxiety last year. In connection with the exchange ques- j lion, it is interesting to note the Financial Times’s criticism of Mr Hughes's address to the bankers. Mr Hughes referred to Australia’s holding gold bullion amount ing to over 76 per cent, of outstanding notes. The Financial Times considers that this is backing far beyond what is necessary. Mr Hughes dwelt on the value of Australia as a consumer of British exports. The Financial Times asks: Why, then, did Mr Hughes refuse to release

some of this superfluous gold a year ago when British shipments to Australia were held up by the deadlock in connection with the exchange? Although the present trade conditions, except with Germany and other countries which are specially favoured by the exchange position, afford little ground for optimism, many financial authorities bebev that a recovery from the depression is not far distant. The newspaper Statist says ; “The following unmistakable indications—the universal absence of financial stringency after one of the severest periods of financial strain that has ever been witnessed, the decline in money rates, the improved speculative sentiment in Japan and the United States, and the reaction in commodity prices—strengthen the belief that business conditions are on the eve of a recovery from the recent depression. and the coming months are likely to bring more hopeful prospects.” The trade boom in Germany continues. The condition of all industries, except chemicals, machine, and the shipbuilding branches, are all extremely good, the iron and steel trades particularly. The bar iron and wire industries are very busy, and the textile branches are enjoying sudden and quickly increasing prosperity. The clothing, tailoring, millinery, and under- ■ wear industries have more work than they can execute, and many of the factories will be unable to fulfil orders owing to materials not being available. Scandanavia and Holland have sent large orders for woollens to America, ordering knitted goods. Yorkshire newspapers state that the German manufacturers are actually selling to wholesale export houses in England both men’s and women’s wearing fabrics at less than they can be made in Bradford to-day, and they are even offering many months’ opien credit to induce business. The reduction in the cost of bunker coals from about 41s to 26s for Tvnes and 30s for South Wales has caused a weakening in wheat freights. Some owners are sending, and are willing to send, steamers m ballast, hoping for further reductions iii bunker coal to enable them to run profitably, so rates declined from 75s to 70s, at which several fixtures were made after 73s 9d and 72s 6(1 had been paid. Charterers have now filled their requirements, and will not consider anything over 655.