HOME MARKETS

Southland Times, Issue 19986, 28 September 1926, Page 7

HOME MARKETS

EFFECTS OF STRIKE STOCK EXCHANGE DULL N.S.W. LOAN’S UNFAVOURABLE RECEPTION (By Telegraph—Press Assn. —Copyright.) London, September 25. .Business on the Stock Exchange has been disappointing, the continuance of the coal strike and the growing stringency of the monetary position having combined to produce a general reaction. Vague rumours of a new conversion scheme have also had a weakening effect on gilt-edgeds and conditions have not been improved by the unexpected appearance of New South Wales as a borrower. The prospectus has been coldly received and such an influential newspaper as the Statist says: ‘The present is not an auspicious time for new issues and though there is reason to expect an improvement in the monetary situation towards the end of the year the immediate outlook does not justify heavy borrowing.” The earliest effect of the New South Wales issue has been the marking down of several recent colonial loans, notably the last Commonwealth five per cent scrip which is now quoted at one and a-quarter discount. Some comment is made on the fact that the New South Wales new loan is issued at 97 whereas last March a loan exactly similar was floated at 98 but it must be borne in mind that conditions in March were more favourable than now as is shown by the price of the 34 per cent, conversion loan which is regarded as an index to gilt-edged values. It was then quoted at £75 15/- and is now £74. SILVER SLUMPS HEAVILY. Yesterday’s sharp fall in the price of silver to 274 d per oz., the lowest since March, 1916, was due to heavy sales on Chinese account. Commenting thereon an authority in the bullion market states that the fall has been more or less continuous since March, 1920, when the price touched 894 d (the lowest being 38jd and the average for the year 61.59 pence). This was brought about by knowledge that the world’s silver supplies had been growing and the demand decreasing. Now there is the added factor that the placing of India on a definite gold standard basis for currency promises to deprive the world’s market of an important consumer, if indeed it does not result in heavy sales on Indian account. POSITION OF TIN. Discussing the relapse in tin prices one of the leading firms of metal-brokers says: “Operations on the London metal exchange do not affect the position as regards supply and demand. Where tin is wanted for consumption there is still considerable scarcity and high premiums are being paid for Straits and other descriptions of refined metal. The Americans have taken advantage of the set-back to buy fairly freely and there has been quite a steady demand for consumers here and on the Continent.” Another broker writes that consumers, especially in America, are supposed to be not too well covered. Some recovery may be reasonably anticipated. WOOL PRICES FIRM. Regarding the wool situation the Economist’s Bradford correspondent says that both in primary markets and London values are so much above Bradford parity that many firms are obliged to become passive spectators for they cannot compete with Continental concerns either in the raw wool markets or in the sale of yarns and cloth. Yorkshire users are unable to follow the market. All recent advances in top yarns, made absolutely essential by the rise in wool, have curtailed demand and in all qualities the turnover has been disappointing. Today’s quotations are very firm but in nearly every case where business is offered it was at a price well below replacement cost. This applies to top yarns and piece goods. GERMANY’S REMARKABLE RECOVERY. Germany’s remarkable economic recovery is described in a report prepared by the commercial secretary to the British Embassy in Berlin who says there is hardly another country of similar industrial importance which could overcome with such comparative ease the complete destruction of its currency or which could have passed with equal rapidity through the subsequent periods of necessary but extremely trying reorganisation. With repard to Germany’s obligations under the “experts’ plan” there is no serious ground for apprehension. It seems probable the full amount can be raised when the time comes. The burden cannot be regarded as excessive nor, making allowances for respective wealth, is it heavier than that of other European countries. Discussing the report the Financial Times says: “Germany undoubtedly owes much to outside assistance. One of the chief obstacles to industrial revival was lack of working capital, practically all of which had been destroyed by inflation. Thanks to the influx of investment funds, mainly from the United States and in a lesser degree from the United Kingdom, Holland, and other countries, this need has been sufficiently supplied during the last two years. It is a sign of returning confidence. Whereas lenders at first demanded ten or eleven per cent, they subsequently were prepared to lend at seven per cent.—A. and N.Z.