COMMERCIAL SUMMARY

Evening Star, Issue 19789, 13 February 1928, Page 8

COMMERCIAL SUMMARY

LOAN SECTION SHOWS WEAKNESS DOMINION ISSUES STEADY, HOWEVER SMALL BOOM IN INDUSTRIALS FEAR OF WOOL FAMINE. PreM Association—By Wireless—Copyright LONDON, February 11, (Received February 13, at 11.15 p.m.) The gilt-edged section of the Stock Exchange has been somewhat overshadowed lately by the upward tendency of money rates, the knowledge that there is no hope of an early lowering of the bank rate, and Mr Churchill’s announcement that a reduction in income tax is out of the question. Consequently, the loan section lias shown some weakness, which is reflected more or less in other investment stocks. Dominion issues, however, remain steady, many showing a slight appreciation. Rubber stocks have been under a, cloud since the announcement of the Government inquiry into restrictions, hut there has been a, small boom in other industrials, notably gramophones, artificial silk, electric supplies, and newspaper shares. The news cabled from New York that Australia, is floating a ten to fifteen millions sterling loan there created some interest in financial circles. Although definite information regarding the issue is not obtainable, newspaper cablegrams from Sydney state that it is believed in financial circles there that London would prefe the issue being raised in Now York, From what cun be learned in the best informed quarters, however, there is not the slightest ground for this belief. In this connection it may be pointed out that since July seven Australian loans, totalling over thirty millions, have been floated here, and with the solitary exception of the City of Sydney issue, all these are now quoted at substantial premiums. Discussing the wool position, a Bradford correspondent writes: “The persistent hardening of raw material values has bad the effect of creating greater confidence in other sections of the industry, and consequently there is steady business, and prices for partially and fully manufactured materials are being gradually placed on a higher level. This continuous response to the lead given by raw material, and the substantial and active bidding lor wool at the colonial sales, despite hardening prices, encourages a feeling of optimism, particularly at the raw material end of the trade, but, on tbo other baud, some predict a very awkward time lor our spinners and manufacturers in the second halt ot the year. Assuming that the present measure ot world consumption in maintained, and there arc no difficulties in financing I lie present purchases of wool, as acute scarcity of all qualities of wool is iut improbable, with something akin to famine prices later in the year; but spinners and manufacturers in tins district arc not worrying unduly about the future. They are making the most of the opportunities offered by the present improved demand lor their products, and are limiting their risk by carrying light stocks; so that when the reaction comes their loss will be restricted.

in connection with the agitation lor the removal of the prohibition on preservatives in butter, one ot the biggest blenders stated that his firm this season was compelled to abandon 'Victorian, of which it previously had used largo quantities, substituting for it Eslhonian and Latvian, for which it is paying a higher price than is asked lor Austialian.

The official price list of the produce exchange yesterday quoted Australian at 1545. 158 s (exceptional 160 s): Polish 1575, 160 s.

In an interesting article explaining the extraordinary advances of tho prices of hides and leather, the ‘ Statist ’ says: Two factors arc mainly responsible—firstly, hides arc purely byproducts, and tlieir number is regulated by the consumption of beef, as in the consumption of beef commensurate with the increase in the usage of leather. There lias been a very large increase in the demand for leather for tho motor industry. It is estimated that in the United Stales motor upholstery now absorbs 62 per cent, of the total production of dressed bides. The second factor contributing to the cattle are raised and slaughtered for beef. There has not been an increase buying by tho United States and Russliortago has been heavy replacement sia.