WORLD OF FINANCE.

Waimate Daily Advertiser, Volume XXIV, 23 January 1929, Page 3

WORLD OF FINANCE.

AUSTRALIAN LOAN. (Per Press Association —Copyright) LONDON, January 21. The underwriters received 84 per cent, of the Australian Commonwealth Loan of £8,000,000, at 5 per cent., issued at 98. The loan is redeemable in 1975, or at the option of the borrower at any time after 1945. The city editor of the “Morning Post” says: “The result of the Commonwealth loan is doubtless a reflection. to some extent, on the effects produced in investors’ minds by certain as]>ects of Australian borrowing, though the unification of control through the Loan Council, and the fact that Australian authorities are thoroughly alive to the necessity for keeping within bounds, constitute the best guarantee that in the long run, faith in Australia’s future will not go misplaced. Experience with other issues, may have induced some to await the closing of the lists in the hope of buying below the issue price, but the stock has seldom long remained at a discount, and has quickly passed to permanent investment hands, for there is apparently an insatiable demand for trustee

ocks, yielding full 5 per cent

A high financial official of Australia House, commenting on the loan, states that the amount left with the underwriters was not unexpected owing to the high issue price. The fact that dealings in scrip closed at 5-16ths discount, after opening at 5-Bths may be regarded as a tribute to Australia’s good standing on the London market. The city editor of “The Daily Te'egraph” states that the response to the Commonwealth loan was poor, but no worse than feared. Though it is not flattering to the credit of the Dominion Tie time has surely arrived when the financial advisers should review the position. Eighty-seven per cent, of the July stock, and 84 per cent, of the March stock was left to the underwriters. This is not a reputation to cultivate. The reluctance of the city to take up stock at the time of issue needs investigation. Either the price is too high or else there is an impression, which certainly prevails that Australia borrows too henvi'y and too regularly. It may be pointed cut that as control is iu ihe hands of a central authoriy, and that sinking fund arrangements exist, the contention may be unfounded. but there is an e’ement of doubt to which attention should be paid. A rest from heavy borrowing would probably be the best remedy. In due course the stock would doubtless be absorbed.