LONDON EXCHANGE.

Waikato Times, Volume 108, Issue 18166, 3 November 1930, Page 5

LONDON EXCHANGE.

LESS DEPRESSION. gilt-edged securities strong. ' \ AUSTRALIAN STOCKS LOW. United Press Assn.—Elec. Tel. Copyright LONDON, Nov. 1. The fortnightly account on the Stock Exchange, which closed yesterday, was less depressing than its predecessors, although, of course, some markets were disappointing. The most satisfactory feature was the strength of gilt-edged securities, especially British funds, which have been in great demand at rising prices. This is regarded as an indication that investors are now going for “safety first.” The banks and other important financial institutions have been buying British funds largely, and several of these reached record high prices, some showing advances during last week ranging from 20s to 3is 3d. Australian Stocks. In sad contrast is the position of Australian stocks, which are marked down to levels which nobody would have thought possible. Financial writers point out that at present prices many long-dated Australian stocks show yields, reckoning redemption, of between 64 and 7i per cent., while some short maturities yield over 10 per cent. The present, therefore, seems a golden opportunity for courageous people to invest in Australian stocks.

That there is a vast amount of money awaiting investment is shown by the heavy over-subscription of all recent capital issues, and if only London could get some reassuring news from Australia there is reason to hope that part of this money would go into Australian stocks.

Business people are’at last beginning to find some little rays of hope in the situation and the opinion is expressed that the worst days of the trade depression are past. Thus, the Federation of British Industries in its forecast for the fourth quarter of the year, says it seems almost certain that some of the more persistent causes of Britain’s industrial ills are at last about to undergo a permanent change for the better.

Already the international gold situation is perceptibly easier, and the world credit situation less rigid. Short term money rates in the principal centres, except Berlin, are at their lowest level since the war, and show signs of remaining there for some time. In addition, judged by the results of certain recent capital issues in this country and the United Stales, long term interest rates are beginning to move in the same direction, although they have still a long way to go before the price of capital will be down to the level required to restore the balance between investment and saving. Touched Bottom. The forces responsible for the world collapse of prices appear almost to have spent, themselves, and in this sense we may be said to have touched the bottom of the depression. _ This does not mean either that an immediate recovery is in sight, or that there will not be further falls in individual groups of prices from now onwards. However, the forces making for recovery should slowly begin to assert themselves. Unfortunately, nothing can prevent the coming winter from being a period of difficulty, although the spring should see some improvement