WEAK MARKETS IN BRITAIN

Timaru Herald, Volume CXLIII, Issue 20640, 1 February 1937, Page 7

WEAK MARKETS IN BRITAIN

NONE OF COMMODITIES AFFECTED NOT ASSISTED BY TALKS BY BANKERS United Press Association—By Electric Telegraph—Copyright (Received January 31, 6.30 p.m.) LONDON, January 30 The second week of speeches by bank chairmen should have been a tonic to the markets, but investors refused to respond to their optimistic pipings. Instead they sold stock so heavily, that the gilt-edged market experienced the worst set-back since the black days of February, 1935. The main influence seems to have been the conviction that interest rates must rise over the long period of combined fears, and increased taxation. The nervousness in the currency situation contributed to the unsettlement, which extended to Dominion issues, and many industrials. Commodity Market Affected Commodities did not escape the prevailing depression. Most metals have been carried to rather high levels in relation to the anticipated production. There is no new factor in the oil market to encourage bulls. Rubber shares enjoyed a temporary spurt, following the committee’s decision to raise the quota, but this was not maintained, owing to the continuance of the United States strike. Sugar became firmer on the announcement of an international conference, for which the industry had waited eighteen months. The British Empire dominates the industry as producer and consumer, therefore the chances of an agreement have been enhanced, but negotiations will be difficult as a considerable surplus capacity still exists. The consuming markets are so closely protected that a free world market absorbs a little over 10 per cent, of the total production. The agreement will certainly mean a further rise in price. In relation to other commodities, sugar does not appear to be overvalued. Copra continues weak, but the tone is , steadier, with consumers showing more interest. There is some speculative inquiry at lower levels. Butter remains irregular, following the unexpected break early in the week, due partly to the publication of stocks, which showed an increase of 3000 tons, compared with last month. The market has been affected by lack of speculation among importers which has been restricted by an agreement with the New Zealand distributors, which may delay the expected recovery. Danish showed a useful improvement. The Wool Outlook The wool trade is gradually moving towards a more settled basis. London would welcome a stabilising influence, providing there is a solid indication of the values Britain and the Continent are prepared to support. The large pastoral companies have mostly elected to sell at current prices. Japan’s switching from Australia to South Africa, in the interests of her own internal economy, has naturally had a disturbing influence, but that operators withstood it, is proof of the strong position of wool. “The Yorkshire Post’’ considers that London values are likely to be pointed for some time ahead.