MONEY MARKET

Hokitika Guardian, 6 February 1930, Page 3

MONEY MARKET

AN IMPROVEMENT

(Australian Press Association)

SYDNEY, Feb. 5

The Prime Minister, Mr J. H. Scnllin, announced to-day that the Federal Parliament would re-open on March mil. and that a conference of the Federal and State Ministers is being held on February 20th. at which the financial and economic position of Australia will be examined.

The gloomy atmosphere on the Stock Exchange was replaced to-day by one of buoyaiic'y, which was the most marked for many months.

The prices of all the better class securities have made an excellent recovery.

The increases to-day in share prices have represented more than three millions sterling. The Australian Bank of Commerce shares rose one shilling. The Commercial Bank of Sydney shares rose 15s, and those of the E.S. aiul A. Bank and the Bank of New South Wales by 2/s 6d. British Tobacco rose Is 6d.

Another favourable development is an improvement in the wool market, which, it is' believed lias turned the corner. At the 1 wool sales the offerings were 10,061 bales to-day, and 1592 were sold, in addition to 1033 bales privately. Tliere was very strong competition from the Continent, Yorkshire and the United States. All the best features of the previous day’s sales were reproduced. Greasy merino made. 231 d.

LOCAL LOAN:

SYDNEY, .February 5

Of tilie Austrailian loan maturing this year, seventy millions are represented by Commonwealth six per cent, bonds. The stock is redueable on March loth, and December loth. Tlie balance are State issues bearing varying amounts of interest. The first conversion loan, already launched locally, will bear interest at six per cent. It has been well received. Though tlie “prices of Government securities have fallen locally 'recently, they have not suffered such a severe set back as in London. The Commonwealth five per cent. .1948 bonds, for instance, are in demand on the Sydnev Exchange at 96/15, whereas the five per cent. 1945/75 stock in London recently sold down to £BS 7s 6. It is now worth £B6. Common wealth .six per cent. 1931/41 bonds are at 30s discount in London, but locally six per cent, issues are worth par o: thereabouts, when the accrued interest is deducted, as it costs 52s 6d per cent, to buy drafts on London. It would not be profitable for Australian or other investors to earmark funds for the purchase of the 6 per cent, loan on London market at this juncture. SYDNEY, Feb. 5.

Regarding the completion of the negotiations for a loan at New York, inquiries of the Civic Commissioners here have elicited that, although arrangements are being made for a loan, there is no information available concerning it.

GOVERNMENT’S RAILWAY LIABILITY.

•SYDNEY, Feb. 5

An awkward situation, arising from financial stringency, is facing the New South Wales Government. This is the possibility of its being required to pay: a £50,003 penalty for failing to com-j plete its contract with Hoskins Ltd. to construct Port Kenibla-Moss Vale' railway. The line should be finished; tlis month, but it is not likely to be; so before the end of the year. The? State Treasury hopes to settle tlie difficulty. i

AUSTRALIAN CREDIT

LONDON, Feb. 4

Despite the reassuring statements' that have come from Sir Granville Ryrie (Australian High Commissioner) and also tlie Hon. Mr Fenton, tiie Commonwealth Customs Minister’s spirited defence of the Commonwealth financial position, there remains a lack o confidence in London city circle l !, resulting in the existence of a hi r > “bear” market. Stocks have reacted to reflect the genuine position. It has even been rumoured that a moratorium is about to' be declared, or that both the Commonwealth and the States contemplate a postponement ol interest payments, and an uneasiness is spreading among the small holders, who are increasingly inclined to regard Australian investments with apprehension. Some city brokers do not discourage this feeling, thus keeping the stocks at the present low level. It is urged here that Mr Scullin and Mr Theodore should explicitly state that there is no intention of postponing any of the interest payments.