TRADE REVIEW

Otago Witness, Issue 3523, 20 September 1921, Page 15

TRADE REVIEW

FIRMING OF GILT-EDGED STOCKS. TIIE BUTTER MARKET. LONDON, September 17. (Received Sept. Iff, at 11.5 p.m.) - J im outstanding feature of ihe Stock Exchange had been the firmness of gilt-edged securities, which even the unsatisfactory Iridi development has failed to affect. The chief cause ior the firmness was apparently the removal of ihe selling pressure which previously existed and t lie absorption of heavy blocks of Government issues whicui had been hanging over the market. Instead there is now peisistent buying pressure in investments markets. Another factor is the extremely easy conditions prevailing in the money market, as an instance of which three months’ J re&sury bills were placed yesterday at an average rate of 30.5 per cent., compared with 11973 per cent on April 21. in marked contrast is ihe dillness in the more speculative sections, wherein prices are mostly tending downward. Mild fluctuations in foreign exchanges are mainly due to the heavy slump m the German mark, the cause of which is difficult to ascertain, in some quarters it is attributed, to ihe heavy reparations payments, and it is suggested that Germany may be trying to bring about a complete collapse of its currency, hoping thereby to secure a revision of the financial terms of the treaty. On. ihe oilier hand, it is stated that leading German banker.;* have given the Government assurances as to the provision of the funos necessary for the next reparation payment on November 15. A well-known wool authority says that severe financial pressure continues to dominate the situation in the manufacturing and menc,uniting sections. There has latterly been more inquiry for export, but orders are principally filled from stock. The home trade is in the unfortunate position of being unable to find a market in America owmgr to the tariff. ft is also suffering acutely irom the European exchange position. Nevertheless conditions are less ! aa verse to improvement in business, an d there are encouraging signs r»t giadu&l relief from ihe more depressing features of slump. Progress is extremely slow, but a gradual adjustment is being maae in the -direction of reduced costs of production and for better v.ages at Home and on the Continent, which together will tend to lessen the existing disparity between Continental and Home costs. A wave of depression is passing over the provision trade. Putter, cheese, bacon, lard, and eggs have all slumped, and despile -a considerable fall in prices, there is little trade passing in any of these commodities. The position regarding butter is particularly unsatisfactory. '1 he optimistic feelmg prevalent among traders two months ago has disappeared, and has been replaced by -doubt and nervousness. Many importers consider the present position is largely due to the muddle-beaded policy of the Government in the handling of its stocks. After hurriedly rushing the price up in July, the Government is> now taking (an equally hurried downward course. When prices were raised many retailers, anticipating a further rise, have purchased heavily, and the public refusing’ to pay the high prices the retailers are now saddled with largo stocks, on which the loss is increased by each reduction in Government prices, so that, instead of Government stocks being steadily cleared, there are still 30,000 tons on hand, and the prospect of moving it seems remote unless prices are further reduced. Consumers show an increasing disinclination to pay tiie present high prices, and though New Zealand is obtainable at 2s 3d per lb, the consumption is small, housewives taking margarine, of which the best brands are obtainable at Is 2d per lb. Ihe newspapers are carrying on a campaign against the high food prices, alleging that retailers are profiting excessively. The campaign is undoubtedly influencing the public.