FEDERAL BONDS FIRMER

Taranaki Daily News, 11 August 1930, Page 6

FEDERAL BONDS FIRMER

SUCCESS OF LOCAL LOAN.. OVERSEAS ‘TRADE POSITION. Melbourne, July 30. The success of the Commonwealth loan resulting in an over-subscription by up- , wards of £2,090,000, coupled with the ■ clearance of the large parcel of shortdated bonds which, has been hanging over the market for some time, immediately had a marked effect on prices for existing Commonwealth bond issues. For instance, in the course of a few days, 5J per eent. 1931 ’s rapidly improved. 1 per cent.,'while the 5i per cent. 1933’s advanced by 12s 6d per cent. A firming tendency was also noticeable throughout all other sections of the bond market, with the result that the. return, which attained the high figure of £6 5s ll£d per cent, on July 23, has since been reduced to £6 4s IJd per cent.

Subscription lists to the new loan were assisterl by the recent slackness of trade, as funds for which there has been no employment in industry have in a number of instances been diverted to the loan. Perhaps, however, the most important feature, of the subscriptions was the numerieal ■ strength of the applicants, viz., upwards of. 32,W, representing an average subscription'of less lha.ii .X4OQ. ; . [ The ligut to useful rains 'which have fallen in many parts, of. Victoria, South Australia and New South Wales have come at a most opportune moment and there appears to be good reason to expect quite a good volume of primary produce this year. ' The main doubtful lactor is tho price at which 'those comnuxnties will be sold in the world’s markets.

Tho Australian preliminary overseas trane ngures just released for the past financial year are to some extent heartening, if only for the fact that imports are ueciimug and that the adverse balance is beginning to dwindle. The.enect vt the reeeni tariff increases, plus, the increasing difficulty of arranging remittances, has resulted in the oune import figures being only half those of the corresponding month fast year, while for the past ween customs revenue has fallen •almost 75 per cent, when compared with the corresponding figures last year.. Although the adverse balance for the halfyear just ended was reduced to £8,318,900, exclusive of bullion, as compared with £2S,tRJO,WO for the corresponding period in 1929, it must be borne m mind that the latest figures are .still unhealthy, 'and, further, that during this particular period of the year the majority of our primary produce is exported, namely, the bulk of the wheat crop and a large proportion of the wool clip. The trend of overseas quotations for Australian stocks has again been downward, but in view of a declining tendency iii British Government and foreign bonds the downward movement has no real significance, although the standing of Australia’s credit is still well below that of other Dominions.