BRITISH FINANCES

Poverty Bay Herald, Volume LV, Issue 17180, 10 February 1930, Page 5

BRITISH FINANCES

AN' IMPROVED OUTLOOK

AUSTBALIAN RECOVERY -RESTORATION OF CREDIT ; (Elec. Till. Copyright —United Pres» Assn.) (Received Feb. 10, 10 a.m.) LONDON, Fob. 8. Conditions and prospects on the < Stock Exchange are for more, favorable ' than they have been for some time. Several factors contributed to this improvement. First, of course, ■:': is the reduction of the bank rate, •which naturally strengthened all giltedged securities and caused a mild recovery in many industrial stocks which had ipreviously been in a depressed condition. Another good factor is the gradual ■ lessening'of 'the liquidation which has " .been troubling the market for months, but from the Australian viewpoint the most satisfactory incident is the steady improvement in Australian Government stocks after their late unprecedented and unwarranted collapse. Financial writers unanimously , attribute the recovery to Mr. Scullin's ■ \ and'ilr. Theodore's reassuring statement, especially of the intention to pursue a drastic policy of economy. Sir Robert Gibson's announcement that tho .''Commonwealth Bank is shipping £7,000,000 worth of gold is also having a good effect. • Commenting on the position, the Financial Times* says it was the heedless conduct of Australia's affairs ■which was 'questioned here, not the good faith of its people. Mr. Scullin • and Mr. Theodore appear now to have not only a full realisation of. the seri- ., .of the position, but also a determination to redress it. If their *f efforts are carried to a logical conelusion there is no need to doubt as to the complete restoration of Australia's credit. . / HIGH-PRICED INDIA LOAN * , The Morning .rost's financial writer States: "The reassurances regarding •tjie Boclirity of the Australian loan and the exchange position caused by the Australian securities is distinctly firmer. Both Australian and Indian stock became as difficult to buy at quoted prices as they have been difficult to sell previously." How groat the improvement has been *i»ahown in the following middle price, dealings: Commonwealth 5 per cents, 1945-85, Tuesday £BS 10s, Friday, £B9; 4} per cents, Tuesday £Bl 15s, Friday, £B4; New South Wales 5 per cents, 1945-65, Tuesday £B4, Friday, £B7. iOther Australian stocks show similar improvements. India is the first borrower of the year. Underwriting is proceeding of £6,000,000 at 6 -per cent, at £99. The , ifcan is repayable at par in June, 1932, tut may. be extended a year, in which -ease it will .be repayed at £lOl. Allowing for redemption in 1932, the loan fields. £6 Os per cent., and if redeemed in 1933 the yield is £6 12s 3d per cent. The object of the loan is to repay maturing bills due on FebiuaTy 27. The terms arc considered yery generous to subscribers, and -may be taken as an indication that Suture borrowers here will have to pay 8 high price. POSITION IN AMERICA RUMORS DISPELLED r NEW YORK, Feb. 9. V The newspapers to-morrow morning will feature extensively in their financial .pages a statement issued by Mr. Brookes, in the names of Mr. Scullin and Mr. Theodore, concerning Australian finances. Headlines such as Australia Spikes Rumors on Bonds — Reassures Holders —Common- ; wealth -will meet all obligations," *'Officials ot Australia give assuranees— Commonwealth's financial 'stability"— stress tho importance of the statement and indicate the widespread interest in the matter, i Blair Co. officials to-day, comment- * ikgjon the cabled reports from Sydney that the loan arrangements had been -completed) declared that a definite settlement has not yet been made. SYDNEY STOCK MARKET FEDERAL LOANS UNPOPULAR (Received February 10, 12 noon.) . SYDNEY, Feb. 10. The Stock Exchange investment market showed* some activity, but the prices of recent days remained pre- " dominant. Support continued to be transferred from Commonwealth loans, which again tended to be easier, to favored industrial stocks. Dalgety's rose is. Commonwealth 5£ per cent, bonds fell 2s 6d, and 6 per cents., Is 3d.