TRADE REVIEW

Southland Times, Issue 21577, 15 December 1931, Page 7

TRADE REVIEW

MARKETS IN BRITAIN STOCK EXCHANGE STAGES RECOVERY DAIRY PRODUCE WEAKENS (United Press Assn. —By Telegraph—Copyright.) London, December 12. After several weeks of gloom and depression the Stock Exchange made one of those quick recoveries which is not unusual when good news comes. In this instance the good news was the Chancellor of the Exchequer’s speech on Thursday in which he announced his emphatic confidence regarding the outcome of the current financial year. This is regarded as a complete answer to the baleful rumours expressed in foreign newspapers that our Budget would not be balanced and that inflation would bo necessary. Mr Neville Chamberlain’s speech showed that nothing of the sort was likely to happen, and the Stock Exchange quickly responded with the result that British funds yesterday- had mostly recovered one and a-half to two points. Mr Chamberalin’s speech was not the only factor contributing to the improvement, for the Stock Exchange saw better hopes of an international agreement on economic and financial matters and a settlement of the problem of international debts. Last, but not least, was the firmness of sterling exchange and the possibility, as a result of the Budget deficit in the United States and increased taxation there, that money will start to flow from the dollar and return into the £.

The improvement of the Stock Exchange so far is practically confined to British funds, but it is hoped soon to spread to other sections. There was, however, one market which showed considerable cheerfulness even before Mr Chamberlain’s speech. This was rubber shares, which hardened all round following an advance in the price of the raw material to 3]d. The improvement is attributable to the belief that the British and Dutch Governments have, or will shortly, come to an agreement to restrict the output. There is at present no confirmation, but there is no doubt that negotiations are proceeding.

In this connection a firm of rubber brokers writes: "If the present negotiations break down it will mean ruin to more than half the British rubber producing companies. But this does not merely mean the entire loss of the capital of present investors —the estates themselves with the trees in full bearing would pass to other hands at a-tenth or less than what they cost the present owners.” Reports from all the provision markets show a weake-mg demand, mostly with lower prices. This applies equally to butter, cheese, bacon, hams and eggs, all of which the consumer is now able to buy very cheaply. Australian “Kangaroo” butter at a wholesale price of 104/- is being retailed in some stores at under 1/- per lb. Eggs, which a fortnight ago were doing so well, had a sharp setback. This is entirely due to the wonderfully warm and unseasonable weather Britain is experiencing and there are now large supplies of English available, which are being retailed at 2d each, consequently the demand for Australian and New Zealand eggs has fallen away and with heavy supplies arriving the wholesale prices have dropped 2/6 per 120. The butter position does not appear very hopeful, for though Danish is firm, thanks to the favourable exchange, there is a decided falling off in the home demand for Australian and New Zealand. As the arrivals from these countries during December will be considerably larger than last December and Australian reports mention a continuance of large supplies, importers are inclined to take a somewhat pessimistic view of the outlook.