TRADE AND FINANCE

Otago Witness, Issue 3803, 1 February 1927, Page 31

TRADE AND FINANCE

THE HOME MARKETS. LONDON, January 29. The speeches of the chairmen’ at the annual meetings of several of the great banks, have been more than usually interesting, and it is satisfactory to note that the views expressed by Mr F. C. Goodenough (of Barclay’s Bank), Sir Harry Goschen (of the National Provincial), Mr Walter Leaf (of the Westminster), and Mr Reginald M'Kenna (of the Midland Bank), although not unduly optimistic, are certainly not despondent regarding the future of industry. As the Economist writes: “The general impression Jeft after a perusal is favourable, for it may be .-said that a moderate and : reasoned confidence in the immediate, outlook was common to them aIL Tlia public may

be the more encouraged by this fact because the pronouncements come from the lips of those having an unrivalled opportunity to feel the pulse of the industrial life of the most important areas of Britain. The Stock Exchange has had a slight setback, chiefly on account of the sudden ■development of unfavourable monetary conditions and the Chinese situation. The hopes which. had been entertained of an early reduction of the bank rate have been dashed, and it now seems likely that the 5 per cent, rate must be maintained till April. Gilt-edged stocks, which had been particularly strong, were chiefly affected, and the new Consols lost the premiums which had been established. There has been some recovery since, and the markets closed much more cheerfully than they were earlier in the week. The prices of colonials have been fairly well maintained. The success of the 'Nigerian £4,250,000 s’s loan at par, which was over-subscribed in an hour, had tonic effect, and prices closed at the best notwithstanding the knowledge that the South Australian loan had been underwritten. This had a favourable reception, and the general opinion is that Australia’s first issue in 1927 will be a success. Its flat yield is £5 2s per cent., which is slightly better than the yield of the last issue of the same stock made a year ago at the same price which is now quoted—just over 99. The wool sales are proceeding with increasing strength, and the week’s busi ness has been most satisfactory for sellers, but the Bradford people are far from happy for'wool is now well above their parity. A Bradford correspondent writes:—“The relative value of merino wool, both in London and the Commonwealth, is now pence per pound above the price that can be made for tops on this market. Some importers have cancelled their limits rather than take the risk of buying more raw material on the basis to which it has now been forced, mainly by foreign competition. It is obvious that our foreign competitors are able to pay higher prices for wool than ourselves. Some wool importers have come to the conclusion that tho lesser risk is to leave the market to these foreign buyers rather than make the position worse by attempting to compete with them for further supplies of raw material. Bradford at present is the cheapest market in the world in which to buy tops and yarns, and those who have cheap stocks or contracts are apparently content to continue selling at prices which do not permit of replacement, save at substantial loss. The finer grades of wool, both crossbred and merino, are stated to be about 3d per pound too dear in tops for this market.’’ Commenting on recent tastings, the Wine Trade Review says:—“Australian wines, which for many years occupied a humble place, are now climbing rapidly the staircase of fame, and one day may even reach the very top. We rejoice at the progress made by the wines produced within the Empire. In stating this we are not disloyal to the older wine trade. There is room for all. No one need begrudge Australia her share. We must remember that the present development was rendered practicable only by Britain’s concession of a new Imperial preference coupled with Australia’s export bounty. Before this the trading conditions were unfavourable. Since then, in a period of about 12 months, the trade has leaped up by 1,000,000 gallons. That shows what can be done under the present favourable conditions. The ultimate future of the Australian wine trade depends, in our opinion, upon the ability of the trade to consolidate its position before the export bounty is withdrawn or the Imperial preference is modified. It is a hopeful sign that the men to whom this work of consolidation is entrusted are not lacking in tact, initiative, enterprise, and, most im portant of all, the flair for business.”