FINANCE AND TRADE

Hokitika Guardian, 28 July 1921, Page 4

FINANCE AND TRADE

ENGLISH REVIEW. j LONDON, July 23 | The reduction of the hank rate has ! effused a more Cheerful (one on the i Stock Exchange, with improved quotations for gilt-edged securities, hut those who anticipated an increase in busi- | ness have been seriously disappointed, j for all sections remain dull, especially ■ industrials, to which cheaper money might have been expected to give a stimulus. Optimists are looking iorward to a further ieduction to 5 per cent before the autumn demand for money commences. II the reduction occurs, there may he a recovery of activity, hut in the meantime there is no indication that investors are departing from their recent attitude ot locking up money iu fixed interest securities rather than speculative investments. A feature of the Stock Exchange is the firmness of recent gilt- ’ edged issues, many of which were at 1 discount, but now were quoted at sub- ' satnital premiums, owing to the r I renstiry’s embargo on new trustee issues j while the Governmet’s new bonds are under offer.

Interest in the foreign exchange mar_ ket centres round the dollar. Iho recent slum]) in tho American exchange is attributable to speculative buying in dollars here and selling in sterling in New York. This is likely to increase the dollar supply in, the autumn, when trade demands will he strongest.

Prospects for the forthcoming Australian anil New Zealand butter season appear lo he very favourable. Traders anticipate a strong market till Alai eh. Owing to the ‘drought, tlie English output ceased exceptionally early, compelling Devonshire, Somerset, and other dairying centres to buy Government butter instead of marketing their own. Similar conditions caused a. shortage of American supplies, anil if the exchange position remains as at present, America is likely to buy large quantities in tlie near future. The drought in Europe forced France. Germany, Switzerland, Norway, anil Sweden to buy Danish butter. Even Austria and Jiigo-Slavia no finding money to purchase Danish Some Continental buyers also am taking Australian and New Zealand butter from the British Government. Stocks oi -everal hundred

tons have already gone to ihe ( ontiuont. It. is'estimated tlie Government stocks are about 35,000 tons, which are likely to he exhausted by mid-October. After that, the marked must bo almost ent irely derendent on supplies Imm

Australia and Now Zealand. The out _ lock for cheese is equally satisfactory. The recent set-back is largely attributable to the heated condition ot one nr two recent arrivals from New Zealand and Canada, which wore offered at low prices, hut the efiects of the drought-hero tire permanent. No matter how much rain falls now, production must he far below requirements, especially as the heat caused a largely increased consumption of cheese in preference to meat.

Yorkshire wool-manufncturing trades am not showing much sign oT revival, though a few mills are running full time to work off arrears. No general increase in activity is possible till new orders arrive on a much larger scale, but some improvement may be expected from the lower cost of production, due to the revised combing tariff and reduction in wages, as some wool has been held up pendingv adjustment of combing charges. Germany is a serious competitor in this branch of industry. Most of tlie German combing factories am busy, and are fully hooked rip for half a year. French .mills are also not,v.\ while a large number of Bradlord plants are idle. Germany is also buying largely tops and noils from Frame and Belgium. Messrs Kreglingcr. of Antwerp, report that Germany lias been the dominating factor of the top market,..and is able to quote comparatively low prices for dress goods,