LITTLE DEPRESSION

Poverty Bay Herald, Volume LV, Issue 16874, 11 February 1929, Page 7

LITTLE DEPRESSION

LONDON STOCK EXCHANGE INCREASED BANK RATE NEW COLONIALS DECLINE (Elee. Tel. Copyright—United Press Assn.) (Australian and N,Z. Press Association.) (Received Feb. 11, 1" a.m.) LONDON, Feb. 0. The raising of the bank rate had the immediate and inevitable result of depressing the Stock Exchange all round, and naturally gilt-edged securities were most affected, for these lixed interest-bearing stocks are mos/c susceptible- to movements of this kind. There was not much selling, but prices were marked down as a precautionary measure, and the movement- continued yesterday, the greatest declines being in the o-j per cent, conversion and 4 per cent, funding loan, which were both quoted at £1 15s below Wednesday 's dosing prices. Colonials also shared in the depression, though older stocks mostly maintained their position, and in some instances arc actually higher than a week ago, but new issues lost ground, and both Australian ."> per cents and Now Zealand 4| per cents gave wuvj and from being at a slight premium relapsed to 5s discount. Bank and inenrnnco shares reflected the decline in gilt-edgeds, but industrials generally have shown some recovery from the initial depression, largely as the result of buying orders from barjfabl hunters on the look-out for* cheap stock, though the reaction on Wall Street- naturally affected many industrials which recently have been attracting American buyers here. Discussing the rise in the bank rate, the Statist says there is every reason to anticipate that the object the bank directors had in mind in raising it, namely the replenishing of the gold will bo fairly rapidly attained. Great Britain is now a substantial creditor in the international short loan market and is calling in loans, especially from the United States and Germany. This, together with more normal factors affecting exchange at this lime of the year, should make for a substantial appreciation of sterling. Also, it; must- not be forgotten, in many Continental centres money rates vary appreciably below London-, and tho result should be a steady tlow of money from these centres to London.