TRADE SUMMARY

Southland Times, Issue 21362, 7 April 1931, Page 7

TRADE SUMMARY

MARKETS IN BRITAIN

MORE CHEERFUL TONE ON STOCK EXCHANGE WOOL AND BUTTER (United Press Assn.—By Telegraph—Copyright.) London. April 4. The Stock Exchange broke up for the Easter holidays in a much more cheerfui frame of mind than seemed likely a week ago/when the gilt-edged market was upset by/ Mr Lang’s repudiation threats. Last week’s satisfactory news from Australia about Wednesday’s payments of interest on Mew South Wales stocks, however, had an immediate salutary effect and prices improved all round, though the business was not extensive.

A further incentive to bullishness was found in the fact that the Budget deficit will not be so large as was at one time feared, also in an improvement in the gold position and the large dividend disbursements on April 1. Yet another good factor was the revival of hopes that the Chancellor of the Exchequer will find it possible to carry through a successful war loan conversion scheme before the end of the year. Industrial shares have had to bear the brunt of several unpleasant shocks lately, notably the poor trading reports of important companies like the Cunard Line and United Molasses Limited. The latter had a disastrous year, showing a debit balance of £913,000 compared with a profit of £972,000 the previous year. Tobacco shares also reacted on expectations that the Budget would impose additional duty, and rubbers were weak in price. Despite all these unfavourable influences there has been no great pressure to sell. The tone of the market is quietly hopeful. With heavy quantities of butter coming forward from Australia and New Zealand, while the Continental production is increasing, the prices for all descriptions have moved in buyers’ favour and it seems likely that these will go still lower. Danish is particularly weak, its price having fallen 34/- per cwt since February’ 14. Commenting on the position, the newspaper The Grocer says: “Various reasons are being put forward for the decline, but it is difficult to assign the real cause. It has been suggested that there has beer, some pressure to sell colonial butter by holders who bought cheaply at c.i.f. terms, also that the demand for Easter requirements both here and on the Continent was below expectations and may be attributable to bad trade generally or the fact that the supplies exceed the requirements.” One satisfactory aspect of the market is that the consumption for some months has been on a very huge scale, thanks largely to cheap retail prices, and the stocks in cold store on March 21 were estimated at 290,727 boxes, compared with 622,018 a year ago.

Regarding the wool position, the Bradford correspondent of the Yorkshire Post writes: “There has been recently more pronounced indications of a determination not to follow an upward course in wool values until it is easier to secure compensating prices for yarns and piece goods. There is a limit to the power of raw material to dictate prices, and it is felt that for the time being it has largely exhausted itself in this respect. The excitement in the raw material market during the last few weeks has not been carried into the piece goods department, and it is surprising indeed to what a restricted extent there has been any response by purchasers of fully manufactured materials to the rapid advance in wool, particularly the finer qualities. The total volume of business in piece goods has not developed as one might imagine from the recent scramble for wool, and competition for the share that has been given out has been so keen that makers of piece merchandise have not found it necessary to pay more than a very small percentage of the increased cost of raw material.” During the company promoting boom in 1928 and 1029 when the shares of many more or less “bubble” companies were foisted on an unsuspecting public, it was a common thing to announce that the issues were over-subscribed, whereas really the public response had been small. Such lying announcements will be impossible in future, as the Advertisers’ Association has arranged for editors to refuse over-sub-scription announcements unless accompanied by a statutory declaration signed by a director and the secretary of the issuing company stating that applications exceeded the number of shares available for allotment and were accompanied by appropriate remittances.