BRITISH TRADE.

Hokitika Guardian, 30 January 1929, Page 7

BRITISH TRADE.

NEW ISSUES STEADILY

ABSORBED

LONDON, January 20. -

Although the Stock Exchange lias been somewhat less active during the last day or two than earlier in the month, business generally has been good, especially ill industrials. The Imperial Tobacco Company’s bonus ap pnrently stimulated interest in speculative shares. The strength of gilt edgeds lias been well maintained, despite withdrawals of gold, which had an adverse effect on monetary conditions. A remarkable 'feature has been tTc steady absorption of new issues, not ably the Australian and Indian loans which opened at large discounts am have now reached par and one-eight I discount respectively. This must he regarded as fin indication of a stead demand lor sound investment stock yielding 5 per cent. AUSTRALIAN LOAN. Certain newspaper writers have been commenting on what they describe a “ the failure of the Australian loan ” because the underwriters were left with HI per cent of it, hut one of the best-informed financial journalists says that the result seems to have been due to the high price rather than to any congestion of new issues on the mar kefc, Discussing the subject with the Alls tralinn Press Association, n promineni banker said: “The fact is, investor have got to know that dealings in those largo loans, issued at compare--tively high prices, will open at a discount. and so, instead of applying for stock first-hand they will wait til dealings begin, and buy it at a dis count. Some stockbrokers advise thcii clients to do this. The rapid extin guisliiug of the discount on the Aus tralinn loan shows what a good demand there is 'for it. It is absurd to call tin loan a failure because it' was not rushed by 1 stags.’ ” GOLD AND BANK RATE,

The shipment of £1,500,000 In gold to Now York this week caused sonic uneasiness on the money market, and the question of a possibility of an advance in the hank rate has been freely discussed. The “I' inaiicia) News,” however, declares that there is no need to become alarmed over tfie efflux' of a 'few million pounds worth of gold, and the writer continues: “ The bank is in a position to neutralise the effect of the efflux on the market through the purchase of securities.” Those responsible for our monetary position are determined not to impose on trade any additional burden through an increase in the Bank rate. Ihc Currency and Bank Notes Act has provided a means to he used in emergency, namely, the possibility of raising the fiduciary issue. The effect of a rise m the Bank rate on trade, at the present stage would he sufficiently grave to justify the employment of this weapon. ' Although the Bank is most reluctant to raise the fiducialy issue from £2(10,000,000, it is likely to choose that alternative in preference to increasing the Bank rate. TRADE OUTLOOK.

The newspaper “ Economist.” in its monthly review, says that the present trend of trade is, on the whole, good. “Encouraging reports are being revived from such staple industries as coni, iron, steel, engineering and cotton. IL may seem misleading to speak of an encouraging situation in the coa industry at a time when distress m the mining areas has become so acute ns to call for a big, sustained national relief scheme, but the position to-day is both simple and tragic. At a cost o closing numbers ol pits, thus thiowtng hundreds of thousands of miners out of work, the rate of output has been reduced to a point where it corrosponi s with the demands. The result is a paradox, acute unemployment on tin* one. hand, against firm markets and a hardening tendency of prices oil the other, though prices are too low to yield a profit to the owners. In the other heavy trades the most encouraging event is a revival of activity i» shipbuilding, which is proving a distinct help to the iron and steel tries and to marine engineering.