BRITISH TRADE

Hokitika Guardian, 4 November 1930, Page 6

BRITISH TRADE

FORTNIGHTLY REVIEW. MORE OPTIMISM IN BUSINESS CIRCLES. United Press Association—By Electric Telegraph—Copyrght.l LONDON, November 1. The fortnightly account of the Stock Exchange, which closed yesterday, was less depressing than its predecessors, although of course, some markets were disappointing. The most satisfactory feature was the strength of gilt-edged securities, especially British funds, which have been in great demand, with rising prices. This is regarded as an indication that investors are now going (for “safety * first.” Banks and other important financial institutions have been buying British funds largely, and several of these reached record high prices,, some showing advances during last week ranging from 20s to 31s 3d. Australian Issues Slump. In sad contrast is the position of Australian stocks, which have been marked down to levels that nobody would have thought possible. Financial writers are pointing out that, at present prices, many long-dated Australian stocks show yields, reckoning redemption, of between 6| and 7 3 per cent, while some short maturities yield over 10 per cent. The present therefore, seems a golden opportunity for courageous people to invest in Australian stocks. That there is a vast amount of money awaiting investment is shown by the heavy over-subscription of all recent capital issues, and, if only we could get some reassuring news from Australia, there is reason to hope that part of this money would go into Aus. tralian stocks. A Brighter Outlook. Business people are at last beginning to find some little rays of hope in the situation, and the opinion has been expressed that tbe worst days of the trade depression are past. Thus the Federation of British Industries in a forecast for the fourth quarter of the year, says: “It seems almost certain that some of the more persistent causes of our industrial ills are at last about to undergo a permanent change for the better. Already the international gold situation is perceptibly easier. The world credit situation i,s less rigid, and short-term money rates hi the principal centres, except Berlin, are at the lowest level since the war, and show signs of remaining there for some time. In addition, judged by the results of certain recent capital issues in this country and the United States, long-term interest rates are beginning to move in the same direction, though they still have! a long way to go before the price of capital is down to the level required to restore the balance between investment and saving. The- forces responsible for the world collapse of prices appear almost to have spent themselves, and in this sense we may lie said to have touched the bottom of the depression. This does not mean either that an immediate recovery is in sight or that there will not be further falls in individual groups of prices. From now onw'ards, however, the forces making for recovery should slowly begin to assert themselves. Unfortunately nothing can prevent tbe coining winter from being a period of difficulty, though spring should see some improvement.”

Dairy Produce. The butter position shows no improvement, for prices of colonial have again fallen back, and the demand is very poor. A striking feature of the market is the contrast between Danish and colonial, for, though the former has weakened this week it still is almost 40s per cwt above Australian and New Zealand. This is mainly due to large purchases by Germany in anticipation of a higher- duty shortly to be imposed there. iltjip Mso reported that some Australian, Zealand and Argentine butter lias been purchased by Germany for the same it a son. Meanwhile Australian and New Zealand butter is being offered by retailers at 14d and 15d per lb. without having any appreciable effect on the consumption. Wool Market. The wool trade is displaying a more cheerful tone, ;|nd, according to a Bradford correspondent, although it is not possible to discover evidence of any great accession of business, colonial tops are satisfactory. It is known upon reliable authority, that the im provemeut in botany spinning now accounts /or some mills running full time, and that, consequently, there are increased requirements. The result is that merino tops on contract are being taken up in appreciably larger quantities than recently. In the botany department, the trade apparently is getting into much better trim, and any other development would indeed he remarkable, considering the level of values ruling for the superior article.