LONDON MONEY MARKET

Evening Post, Volume CXXI, Issue 4, 6 January 1936, Page 10

LONDON MONEY MARKET

INVESTMENT PROSPECTS

EUROPEAN SITUATION

(By Telegraph—Press Assn.—Copyright.) LONDON, January 4. New capital issues were almost threequarters of those in 1929.

Empire borrowings were disappointingly low, being only £15,000,000, compared with £29,000,000 last year, and £63,000,000 in 1928. Foreign lending shrank to vanishing point owing to the continuance of the Treasury embargo. The immediate outlook appears bright. . The reports of bank chairmen are certain to be favourable. Furthei advances in industrials are probable within the next few weeks. Longterm prospects, however, are obscure. The European situation is causing the gravest anxiety. Italy cannot escape bankruptcy, whatever the Abyssinian issue. Germany's condition is equally desperate. The increase in the number of unemployed, the breakdown of foreign trade, and the scant wages paid to those in employment suggest a serious' crisis in 1936. The "Economist", in its monthly trade survey points out that while further recovery will depend on international events the encouraging index of business activity remains unchanged at September's high level. INDUSTRIAL OUTLOOK. All sections of engineering are making the greatest headway since 1929. The revival in the textile trades is marked, especially in wool, where it is largely due to the rise in raw material prices. A feature of the past few weeks has been the scramble for coal as an insurance against a possible strike of coalminers. The stock and share markets entered the new year cheerfully fortified with the most pleasant recollections of 1935, in which industrial activity shook off all hesitancy and proceeded to surpass the 1929 high levels. INCREASED EMPLOYMENT. A total of 340,000 more persons were employed in building construction during 1935, and new records were mada in the steel industry, which was almost embarrassed by new business towards the end of the year. The volume of transactions on ths Stock Exchange was about the samo as m 1934. Government stocks were irregular. They fell almost uninterruptedly and steeply for the first nine months, but only partially recovered thereafter. Their movements do not offer conclusive evidence of the futui'e of cheap money, as their recent firmness is due largely to technical considerations. The general opinion of city business men is that cheap money has reached its peak. The oil companies had the most profitable year since 1930. Non-ferrous me Lais were sounder all round. Rubber was disappointing. . The commodity markets, especially wheat, are more bullish and more sober.