STEADIER SIGNS

Poverty Bay Herald, Volume LXIV, Issue 19315, 4 May 1937, Page 13

STEADIER SIGNS

BRITISH INVESTMENTS STOCK EXCHANGE TREND ANXIETY STILL FELT SETTLING DAY AWAITED (Eloc. Tol. Copyright—Unitod Press Assn.) (Reed. May, 3, 3 p.m.) 'LONDON, May 2. The trade summary indicates that there are already signs that the share markets will be more sober in the coming week. The liquidation trend has spent itself, but it would be unwise to prophesy, and Thursday's settlement is awaited with some anxiety as heavy differences must be met.

If it passes without trouble, it will open the way to a slow recovery on a broad front. investors already are nibbling at bargains, which in more normal times would be considered too good to miss. The financial press is advising cautious purchases, stressing the attractiveness of certain industrials and forecasting a sharp recovery of rubbers, of which dealers are short of stocks. The Economist considers that the Chancellor of the Exchequer, Mr. Neville Chamberlain, undoubtedly was; right in stressing that the effects of the profits tax announced with the. Budget had been exaggerated. "Nevertheless," says .the Economist, "normal conditions are. impossible until the tax; uncertainties are cleared up. The. present quotations of many sound shares are the result of fear rather than careful weighing of investment factors. Nevertheless, there is scope for a further all-round increase in the earnings of industry, though the scale of the past four years may become narrower. Costs are rising and labour is restive. Opportunities for increasing profits and some for developing industries still exist, but it would not be surprising if the major rise of equities is past." One result of the present heartsearching has 'been to focus attentionori the importance of maintaining Britain's export trade. There is a growing feeling that manufacturers should not allow rearmament orders to lead to industry disequilibrium, or to draw off productive activity from the export trades on which Britain's prosperity rests. The movement in favour of a revision of the Ottawa agreement is increasing. Even the Government is realising the importance of widening the area of world trade and a lowering of tariff barriers in order to encourage'foreign countries to Imv more British exports. Commodities have suffered from heavy selling, but have withstood it reasonably well.

The Financial News considers that the long-term trend of commodities should bo definitely upwards, though henceforth i,t will be more selective.