EFFECT OF CHEAP MONEY

Taranaki Daily News, 18 April 1932, Page 7

EFFECT OF CHEAP MONEY

GILT-EDGED STOCKS FIRM

LOWER BANK RATE LIKELY BRITAIN’S BID FOR TRADE ELECTRICAL FIRMS’ MOVE By Telegraph—Press Assn.—Copyright Rec. 5.5 p.m. London, April 16. Thanks to the cheapness of money the gilt-edged section of the Stock Exchange is firm and fairly active, and as the monetary position seems likely to become even more favourable British funds may advance till their yield falls below 4 per cent. At present their average yield is 4.1 S per cent. Many people confidently expected the bank rate would be reduced last Thursday. Certainly the domestic conditions seemed to warrant a downward, movement, but once again the Bank of England directors were compelled to exercise caution owing to the disturbing position abroad, especially the uncertainties regarding the Kreuger and Toll position, which becomes worse every day. Other adverse foreign factors in the situation are the acute depression in Wall Street, the financial crises in many European countries and the disclosure at Geneva that Greece must default and that Bulgaria can pay only •half its interest due to bondholders. Under these conditions it is not surprising that foreign stocks have been irregular and industrial shares generally dull?

The British electric equipment industry is making a hold bid to extend its overseas trade. The Evening Standard states that the British Electrical and Allied Manufacturers’ Association is working out a complete detailed scheme for Imperial co-operation which will be discussed at the Ottawa conference. The scheme will cover Canada, Australia, New Zealand and India and contain suggestions for the exchange of research and patent experience, plotting of statistical information, the exchange of engineers and similar rationalising measures. British equipment firms are also making a powerful drive on the South American market, which hitherto has been largely in the hands of American, Swiss and German firms. , ■ ,