STOCKS RISE

Southland Times, Issue 21658, 21 March 1932, Page 7

STOCKS RISE

FIRMING IN LONDON 7 EFFECT OF BANK RATE REDUCTION TRADE SUMMARY (United Press Assn.—By Telegraph—Copyright.) (Rec. 5.5 p.m.) London, March 19. There could be no better indication of the strength of the Stock Exchange than the way the markets stood up to the shock of the death of Ivar Kreuger, head of what the Statist calls the world’s greatest industrial undertaking whose stocks had stood at one time for all that was safest among international speculative issues; indeed the effect was much less than might have been anticipated. Though some international stocks were depressed at first, recovery was well under way when the markets received another shock —this time a pleasant one—in the shape of an unexpected reduction of the bank rate. This had an immediate effect and an outburst of buoyancy swept over all markets, especially gilt-edgeds v and when the reduction was followed by easy conditions on the money market and revenue returns showing that a small budget surplus was probable, substantial rises occurred. Among the stocks which benefited are Australians, which previously were steadily recovering. They now show a firmness all round. The reduction in the bank rate is regarded as being made with a view to helping the Government’s conversion scheme, though its success was assured beforehand, as it is understood that about £100,000,000 of the maturing 4 J per cent. Treasury bonds are held by public departments. Although butter prices continue low, some satisfaction is found in the fact that the consumptive demand is strong not only in Britain, but in three or four European countries which have been buying freely. This has enabled importers to clear away very heavy arrivals. The total imports for the past three months show an increase over the same months last year of 289,000 cwt. and no less than 517,000 cwt. over 1930; yet. consumption has been so good that cold storage stocks at the beginning of March were only 46,000 cwt. in excess of those at the same time last year and 121,500 less than in 1930. The demand for Australian and New Zealand butters has been stimulated by their cheapness aided by many shopkeepers pushing Empire goods. The best New Zealand butters are retailing at the stores at 1/2 and 1/4 a pound and Australia at 1/- and 1/2. The Australian fruit season opened with, the arrival of the Narkunda and the Jervis Bay bringing pears and grapes. Unfortunately they have not come on a good market as the South African season is at its height and large supplies are being landed not only of pears and grapes, but plums, peaches and nectarines. The total shipments alreadv advised from South Africa amount to 1,598,000 packages. These are arriving in splendid condition, and thanks to a comparatively short sea journey show very little waste; consequently Australian fruits have met very strong competition, and prices so far realized for pears are only about 11/- a bushel.