TRADE REVIEW

Southland Times, Issue 21219, 21 October 1930, Page 7

TRADE REVIEW

BRITISH MARKETS

DEPRESSING INFLUENCE ON STOCK EXCHANGE

OUTLOOK FOR WOOL

(United Press Assn.—By Telegraph—Copyright.)

London, October 18.

Except for gilt-edged securities the last fortnight on the Stock Exchange has been full of depression and uncertainty. Many adverse features, both at Home and abroad, combined to make the people nervous and disinclined to speculate. Trade returns were bad while the unemployment figures continued to rise. The revolutions in Brazil and elsewhere in South America caused a heavy slump in all Brazilian securities. Then came the financial and political unsettlement in Germany and the continued, flow of gold from Berlin to France. Finally came fresh slumps in Wall Street. Under the weight of all these misfortunes it is not surprising that the settlement prices at the account which closed yesterday mostly showed substantial falls.

On the other hand the investment section of the Stock Exchange has shown a remarkable firmness. All British funds have improved, notably the war loan five per cents, which reached a record of £lO5 1/3, despite the Chancellor of the Exchequer’s statement that he intends to carry out a large conversion operation when the time is favourable. That there is plenty of money available for good investments is shown by the success of the recent issues of this class, all of which are quoted' at good premiums. The dealings in the Indian loan of £12,000,000, which was over-subscribed, opened at a premium of 5/- and closed at £2 1/3. The success of this issue imparted strength to the older Indian stocks, and Australians showed a steadiness, although they are still far' lower than they ought to be. Britain's Revenue Prospects. An interesting event this week was the Chancellor of the Exchequer’s speech to bankers and financiers at the Mansion House. Mr Snowden spoke somewhat hopefully on the revenue prospects, and said he would do everything possible to avoid imposing new taxation. “Possibly I shall have to outrage my strict financial principles and, may be, do things I could not justify in ordinary circumstances,” he said. What Mr Snowden means by this cryptic sentence is causing considerable speculation, some regarding it as an indication there will not be any interference in safeguarding and other revenue duties and that there may be a raid on the sinking fund. Discussing t lie wool position the correspondent of the Yorkshire Observer says: “Unfortunately rhe fall in values to the present level, while disastrous to pastoralists, has not vet benefited those engaged in wool manufacture. The readjustment process is a long one. Wool is merely one of a multitude of primary commodities progressing towards a new price level, but the best corrective of natural pessimism is a recognition of fact that when commodity prices settle down to a new equilibrium sounder trade will spring up in the wake of the storm, and in this wool manufacture will share. It is certainly rather a dreary business waiting for an expansion in the demand for wool commodities which producers are justified in expecting. Now that cheap raw material and lower conversion costs permit, West Riding textiles will be offered at extremely attractive prices, but unless all economic theory is wrong such a demand will eventually arise and industry will have cause to reflect, with satisfaction, upon the possession of an abundance of cheap wool.” Butter Market Improves. The butter market has shown some improvement, both in demand and prices this week, and hopes are expressed that the bottom has been reached. One of the principal importing firms in its monthly report says the main trouble has been' the heavy stock which has been held in cold stores for a long time. It was hoped that relief would have been obtained in September by smaller imports, but actually the September imports were 6000 tons in excess of those for September, 1929, and 8500 above '1928. Although consumption has been stimulated by lower prices arid is now estimated at well over 6500 tons weekly, these heavy September imports did not enable the stocks in cold stores to be reduced quickly enough and holders were getting scared in view of the big increase in production in New Zealand, Australia and the Argentine and an anticipated increase in the Baltic provinces. It would appear that the pressure to sell was unduly accentuated, and during the past few days a reaction occurred, retailers steadily .reducing prices to the consumer, and further increases in consumption may be looked for. The report adds that with complaints of bad trade general and the number of unemployed increasing weekly, the consumers’ demand for Danish at 3d per pound above New Zealand and Australian is extraordinary. Vintage Yields. The vintage of Western Europe appears likely to be poor according to latest reports. The crops in the Champagne district are below the average quantity, and growers are pessimistic about the quality. The quantity of port made will be small, and the Bordeaux crop is almost a complete failure. In most of the sherry districts the yield is about 10 to 20 per cent, below 1929, but the quality is equal to the average yield. Burgundy is rather below the average. The quality is less good except in the white wine districts where the quality is better but the yield small.