LONDON MARKETS

Wanganui Chronicle, Volume 80, Issue 68, 22 March 1938, Page 7

LONDON MARKETS

Huge Losses Over Week NORMALITY RETURNING COMMODITIES CALM [By Telegraph—Press Association —Copyright] Received March 21, 5.5 p.m. f LONDON, March 20. The Wall Street crash dealt a severe blow to the expectation that the London markets would reopen firmly after the week-end. i The losses of the past week are unparalleled since the 1929 slump.

The Financial News states: “The ordinary share index lost nearly eight points in three days despite the fact that it had been persistently declining for nearly 15 months. There are signs, however, that the normal investment criterial are beginning to reassert themselves.”

The consensus of shrewd city opinion is that leading ordinary and commodity shares are at present greatly undervalued. On the contrary, gilt-edged issues are likely to fall more and more from favour.

Private investors are likely to be forced to seek higher yields if the cost of living rises and the purchasing power of money dwindles as a result of the extensive rearmament. The consensus of opinions seems to be that commodity shares offer the best prospects in the nexi 12 months. The Economist considers that the downward trend in business activity is likely to be accelerated in the immediate future for the plans for the intensification of rearmament cannot immediately be put into operation. While storms are rocking the Exchange of Europe and America the commodity markets are comparatively calm; indeed, metals were subject to a small burst of speculative activity early in the week, though it has since petered out. Prices were only slightly higher on balance. Rubber has remained at a steady price and seems to be stabilised around 7.1. Wool Buyers Active The London wool sales turned out exactly as anticipated. Home buyers are fairly active as they find the wool reasonably cheap compared with the primary markets and the feeling is that a serious decline in values is improbable. ; Butter Firm The butter market remains firm. Some traders early in the week even bid up to 121 s lor Australian and New Zealand in the expectation that the political events would strengthen the market. The total imports for February were 42,925 tons, compared with 33,877 tons last year. Australian and New Zealand imports were 30 per cent, higher. The Baltic countries have shipped almost double last year’s tonnages. It is remarkable where it has ail gone as the surplus does not show in cold store stocks. Arrivals in the next few weeks will not be heavy so the expectation is that the market will remain firm until increasing supplies are available from’ Europe. ( The cheese market is also firmer. The arrivals of New Zealand con* tinue to be booked up before they are available resulting in a continued scarcity of stocks for general marketing.