MORE SOBER

Waikato Times, Volume 121, Issue 20184, 3 May 1937, Page 7

MORE SOBER

LONDON STOCK MARKETS. BLOW RECOVERY EXPECTED. EFFECT OF THE PROFITS TAX. United Press Assn.—Elec. Tel. Copyright. (Received May 3, 1.25 p.m.) LONDON, May 2. There are already signs that the markets will be more sober next week. The liquidation has spent itself, but it is unwise to' prophesy. Thursday’s settlement is awaited with some anxiety, as heavy differences must be met. If it passes without trouble it will open the way to a slow recovery on a broad front. Investors are already nibbling at bargains which in more normal times would be considered too good to miss. The financial press is advising cautious purchases, stressing the attractiveness of certain industrials and forecasting a sharp recovery in rubbers, of which dealers are short of stocks.

The Economist considers that Mr Neville Chamberlain was undoubtedly right In stressing that the effects of the profits tax have been exaggerated, nevertheless normal conditions are Impossible until the tax uncertainties are cleared up.

The present quotations of many Bound shares are the result of fear rather than of careful weighing of investment factors, nevertheless the scope of a further all-round increase in the earnings of industry on the scale of the past four years is becoming narrower. Costs are rising and Labour is restive. Opportunists for increasing the profits of some developing industries still exist, bht it will not be stirprising if a major rise in equities is past. Importance of Export Trade. One result of the present heartsearching has been to foous attention on the importance of maintaining Britain’s export trade. There is a growing feeling that manufacturers should not allow re-armament orders to lead to upsetting of the equilibrium of industry, or to draw off productive activity from the export trades on which Britain’s prosperity rests.

The movement in favour of ihs revision of Hie Ottawa Agreement is increasing, even the Government realising the importance of widening Die area of world trade and the lowering of tariff barriers, in order to encourage foreign countries to buy more British exports.

Commodities have -suffered from heavy selling, but have withstood it reasonably well.

The Financial News considers that the long-term trend of commodities should be definitely upwards, though henceforth It would be more selective.