FINANCE AND COMMERCE

Hokitika Guardian, 2 December 1931, Page 6

FINANCE AND COMMERCE

FORNIGHTLY REVIEW

LONDON STOCK EXCHANGE

depressed

■LONDON, November 28

Tile Stock Exchange at present is very depressed. All markets are listless land the volume of business is very small. Buying :is almost at a standstill. There‘lias not been a lieaVy volume of selling, but what there has been was sufficient to cause prices steadhy to decline. This unfortunate position is mainly due to the financial uneasiness prevailing ail over Europe, especially Germany. There has been a continued fall in ■sterling* exchange, which, caused a serious relapse of gilit-edgeds. Australian issues, earlier in the week, had shown a good recovery as a result of the coming general election, but they were unable to withstand the adverse effect on the value of the pound sterling falling below 15s, both in Paris and New York.

WHEAT PRICES. A well-known authority in the grain trade says .that the' recent rise in wheat was. more than could have been expected and buyers, having satisfied their requirements for the time being, are not encouraged to enter the market again because of the unpromising 'outlook, as far as Britain was eoncenV'd with the pound worth approximately los. Wheat sold ait 5s per . cental in Liverpool, hut really was worth only 3s 9d a cental, so that the price was practically hack to the low level of 3s Bid, touched in August. The expectations held of higher prices are unlikely to he realised). Even allowing for uncertainty regarding Russian supplies, prices probably will remain in the neighbourhood of their present low level if European countries restrict their imports to the smallest possible dimensions.

EGG TRADE. Dominion eggs in the last few weeks have been firm and the demand is active. Arrivals of Australian, South African and New Zealand eggs have been fairly heavy, but they were we!l cleared at better prices. This is most satisfactory, for prices, of l>oth English and Continental have declined as production is still large, thanks to the mild weather prevalent in Europe. The popularity oFUthe Dominions’ eggs ■is ■ ■ largelyv'Jtttributahle to the slogan “Buy British,” but their excellent quality is also an important factor. The present retail price of Dominion eggs' is 2d each, whereas English new laid are 3d, consequently many housewives are giving prefrence to the former, which “Are also extensively used in restaurants.

INDUSTRIAL OUTLOOK. , The trade report of “The Economist,” describing the effects of the suspension of the gold standard says: “It is clear that certain industries have benfieted to a moderate extent. The .textile trades are definitely more active, and also are able to hold out for better prices. The general tone of the .enginereing industries is more hopeful and employment is a. little less. Serious enquiries are beginning to circulate more freely, though it is generally admitted that order hooking has not so far been any fuller. On the other hand the many advantages conferred on the export coal trade by th© depreciation, of sterling have already been neutralised by such developments as the French sur-tax, the British imports, and the determination to Poland to maintain her subsidised coal exports at all costs.

The improvement in the iron and steel trades ,is confined to the lighter branches which require only a relatively small tonnage of steel. The heavier branches are suffering from continued depression in the shipbuilding industry ancl the reluctance of industrialists generally to launch our ©ti new capital* expenditure or indeed to make new issues of capital. Finally the Continental steel trade is so disorganised as /badly to need orders, and attempts are being made to undercut British prices, even at the present level of sterling, to a certain degree.

DEPRECIATION OF STERLING. The initial favourable impact of the depreciation of sterling upon British industry is beginning to wear off, the fact 1 having to be faced that world trade is still in a desperate position. News i-s being received from abroad almost daily that the fresh 'restrictions on imports and exchange dealings show'that the world, is rapidly drifting into a position where international trade will he brought to a standstill for the simple reason that no country will he willing to buy. The effect of this upon the outstanding international debts, both public and private, and algo the export tract© of this and other countries is unpleasant to contemplate.