ELEMENT OF MYSTERY

Gisborne Herald, Volume LXVI, Issue 20003, 31 July 1939, Page 7

ELEMENT OF MYSTERY

N.Z. LOAN OPERATION PROVISION OF BALANCE MARKET NOT ATTRACTED (Elec. To], Copyright—United Truss Assn ) (Reed." July 29, 2 p.m.) LONDON. July 28. Though the Stock Exchange turnover remains low, the week brought appreciably increased activity, with price trends .suggesting that giltedgeds equities are parting company after so long moving Magically. in unison. Investors are at last ning to appreciate the implications of the borrowing programme. The rising business activity is now within 2 per cent .of the 1937 boom level

New Zealand loans rose a further point. There is some mystery- as to how the balance of the loan will be taken up if it is not fully subscribed. It is believed large houses, the discount market, and the banks, which are estimated to hold between them 50 per cent of the maturing loan, intend to convert their holdings, but it is felt that the money- market is disinclined to make cash applications. The New Zealand operation is welcomed! in financial quarters, but in view of the onerous redemption terms, industrial circles foresee the possibility of -unpleasant repercussions for British exporters, unless commodity prices rise.

The City now visualises a general upswing in- commodity prices, war or no war. It argues lha-t Government requirements of essential commodities are likely to be increased if the present uncertainty continues, while war would bring inflation and headlong spending. Commodities generally have reflected this view.

Messrs. Dawson and Company consider that the wool outlook is good. The demand for slipes at present gives New Zealand an advantage over Australia. Stocks of fine wool tops are ample for current needs.