TRADE AND FINANCE

Waikato Times, Volume 94, Issue 14585, 7 February 1921, Page 5

TRADE AND FINANCE

MORE CHEERFUL FEELING REMOVAL OF EXCESS TAX. BUTTER IN BETTER DEMAND. (Australian and N.Z. Cable Assn.) Received February 6, 5.5 p.m. LONDON, February '5. Mr Chamberlain's announcement of the discontinuance of the excess profits duty has given intense satisfaction on the Stock Exchange, and has Imparted a cheerful feeling to the markets because it removes the feeling of uncerUinty which was prevalent for the past six months. The general decline in share values during that period was not due so much to pressure to sell as to absence of interest on the part of tne public owing to the unsettled outlook which counteracted the effect of the lowness of prices. The removal of the excess profits duty should have a ton!o effect on the investing public and cause a resumption in the buying of industrial stocks owing to the expectation of improvement in trade which is likely to follow the removal of the tax, especially as no other tax is submitted; but until that improvement comes a general advance in values cannot be expected. On the other hand the announcement of no new taxation will probably have an adverse effect on some gilt-edged stocks which are available for the payment of death and other duties, notably Victory bonds, which declined slightly. Other investment stocks like Colonials may feel the effect of the competition of industrials. The money market is rather easier, but much money is going into the Exchequer, and there is little prospect of permanent ease till the end of the Government's financial year at March 31. Meanwhile there is less talk of a reduction of the bank rate, but its advocates have not yet abandoned hope. The Bradford wool market is meeting with good demand for fine tops and yarn noils from the United States, mainly speculative in anticipation of proposed tariff changes in March. The home trade is very quiet. The heavy stocks of piece goods on hand still form an obstacle. The hostility to the Wool Realisation Association is diminished somewhat, but the trade is keenly watching its operations. The general, feeling is that prices are stabilising at about Die present basis, which are considered about the bottom. A readjustment of retail prices is now urgently required to restore public buying confidence. Freights continue to decline, owners ktenly competing for the small amount of business offering. The rate for Australian wheat is now about 67s 6(1, with 5s reduction for West Australian loading. The reduction in the price of Government butler is causing a better demand, especially as some shops are retailing at 2s lOd and 2s lid in order to increase customers, but the statistical position is making buyers generally nervous and indisposed to enter into commitments ahead. Argentine ami South Africa are offering butter at 180 s to 200 s c.i.f. The banes are very dissatisfied at the British Government price being reduced to 2265, and they threaten to slop shipments, but there is little fear of this being done as other c< untrics are unable to purchase freely. The metal markets displayed a better tone on Mr Chamberlain's announcement. Copper is firm on reports of negotiations in the United States for a loan to finance surplus copper in producers' hands. If the loan succeeds it is likely prices will rally temporarily. The tin market is unsettled owing to 11. e uncertainty regarding the action of the Malayan Government. Heavy sales \i the middle of the week were followed by bear coverings which caused a rse on Friday. Spelter remains steady. Reports of further curtailment in American production had no effect here. The Germans are offering to sell for shipment till April, being apparently anxious to dispose' of as much as possible before the 12 per cent export duty omes into force.