FINANCE AND TRADE

Hokitika Guardian, 29 June 1921, Page 4

FINANCE AND TRADE

BIUTISH SUMMARY. AUSTRALIAN AND N.Z. CABLE ASSOCIATION. * LONDON, June 25. Although the volume of business on the Stock Exchange does not show much increase, the tone is distinctly more confident following the decrease in the bank rate which came quite unexpectedly .the market having almost abandoned hope of a reduction while the coal strike, was' unsettled. Other factors contributin'!; to the improved sentiment are the settlement of the cotton operatives’ dispute, Mr Lloyd George'* hopeful statement in the House of Com j mons regarding a probable trade recovery, and also the failure of the miners’ leaders to induce a general strike. All these are tending to awaken optimism outlook of the industriaT world. The improved sentiment is most apparent on the gilt-edg-ed market, where everything is firm. Tlio immediate result is the general appreciation of colonials and the hardening of recent Tasmanian and South Australian loans which previously were at a discount of I and If respectively, and are now quoted at three-eighths and one. The reduction of the bank rate must have a good effect on trade generally by making it easier for traders to carry stocks of goods which cannot safely be marketed now, and also enable traders to borrow on less onerous terms. It should also induce healthy speculation, which will give a much-needed feeling of confidence. The reduction is likely to divert money into industrial issues in preference to purely investment securities, which attracted most of th° available money o| late, or leaving it on deposit. It is considered very unlikely that there will be any further early reduction of the bank rate even it the coal strike is settled, unless a very niiitrial change occurs in the monetary conditions during the coming months. The balance of probability lies rather in the direction of a higher bank rate than a decline.

The wool position shows a decidedly easier tendency, the effect of the reduction of the hank rate being neutralised by tlie result of the 8.A.W.8.A. wool sales at Liverpool, where prices were

above five per cent, below the London closing rates. The weakness is mainly noticeable in Yorkshire sorts, whereas Continental wools are well maintained. The trade apparently fears that the offerings here of Australian in the next two months will be more than it can absorb. Best 64’s tops are now offered

at .[2d, which is below the cost, of production at the price paid for merinos at tin- last London sales. Tip. demand for tops at Bradford is very slack, and in face iff the large prospective offerings of wool .there is little hope ol any appreciation in values. It will bo a matter for congratulation if they do not relapse. .Meanwhile sales of English wool continue, and show a serious decline as compared with 1920. Many farmers arc bolding their clips owing to the unsatisfactory prices.

The freight market is very dull, and

nothing is doing. For Australian wheat owners are asking 62s (id to 655. They say there is very little tonnage in ilit* Australian neighbourhood, and it is impossible to send steamers then l unless they receive this price. Charterers are holding off, not being disposed to go beyond 60s.