THE FINANCIAL OUTLOOK

Sun (Auckland), Volume IV, Issue 929, 24 March 1930, Page 12

THE FINANCIAL OUTLOOK

WORLD MARKET TRENDS A BRIGHTER TONE By “Noon Call.'’ When we consider the varying, movements of the markets over the i past six months, particularly the steady ! decline in the prices for primary j produce, it is perhaps not hard to understand why the average man in j the street is a little baffled in respect ! to the near-future otitlook. Reflecting j momentary and industrial conditions, i generally, the investment market : throughout the world has suffered j severe reverses during the period; big! paper losses have been shown, and the 1 position, generally, has appeared to the j uninitiated far from bright. To the I keen student of world finance there is much to support the contention, however, that the financial position todaj is much sounder than that of twelve months ago, and, while it must be admitted that certain industries, in com 7 mon with a big section of the money market, are finding conditions rather difficult, the outlook is gradually j assuming a brighter hue. Local conditions may have a tern- j porary effect on the position in so far j as it effects New Zealand, but, in the J long run, affairs here must respond to j world movements; experience has ever | proved this to be the case. Thus, the steady decline of the London bank rate to 35 per cent., indicating as it does a change for the better in world affairs, must be regarded as very satisfactory. It has been rightly said that the Bank of England rate acts in normal times as a barometer of financial conditions of the world, and any features of political or economic significance are reflected by its course; movements on the London market over tho past six months have indicated clearly that industry, in particular, and economic conditions, generally, are gradually being established on a sounder basis —a j basis from which healthy expansion ! can be expected. The return to cheap j money means that industry will be : stimulated, more money will be placed j in circulation, and there will be an all j round improvement in the demand for ■ primary products in which the people j of New Zealand are directly inter- i e^sted. A glance through the London Stock j months shows a rather interesting tre Exchange quotations of the past three months shows a rather interesting trend, in so far that it indicates the tendency, always noticeable in times of stress, for the investment market to neglect speculative securities and turn more and more to gilt-edge stocks; this in itself can generally do regarded as a sign that industry and | finance is being established on a more i satisfactory basis. The four and a [ half per cent. English Funding Loan. perhaps the best barometer, outside of ! the Bank of England of English I market trends ,Ims firmed appprecii ably since the beginning of the year from £BS 10s to £92;; New Zealand j Government six per cent. Loan, has I moved up from £lO2 to £lO4 10s; j this is significant in the fact that it i seems to indicate that the London ! market is gradually moving in the ' Dominions* favour in respect to meetj ing loan money requirements. There are other signs which indii cate that, although local conditions j may not appear very healthy at the I moment, the way is set for a return Ito better times; it may take some time, but world movements cannot be I checked; it might be fitly said of the i position at the moment, in fact, that I “it is always darkest just before the ! dawn.” New Zealand is fundamen- ; tally sound and rich in resources; in- ! vestments made in New oZaland eni terprises which are established on a j -sound basis must turn out satisfactoryr-

COMPETITION IN APPLES NEW ZEALAND AND U.S.A. ON THE MARKET LONDON, Saturday. The Australian and New Zealand apple season opened with the arrival yesterday of the Tainui with 8,500 cases from New Zealand. Importers are not optimistic regarding the market, for supplies of American and Canadian, although less than last year’s, are exceptionally heavy. The quantities are still very large, arrivals for March being estimated at over 1,100,000 cases. Americans are likely to arrive in large quantities for several weeks to come, so that apples from the Southern Hemisphere will have to face keen competition, especially as Americans are in excellent condition- Brices are comparatively cheap. best Oregon Newtons making 15s 6d a case.

WOOL MARKET WEAK LONDON, Saturday. ' Describing tho position in the wool market a Bradford correspondent writes:—“At the opening of the London sales greasy Merino wool was no more than 5 per cent, cheaper. This means that there is more buying power and more definite requirements to fill than has been previously acknowledged. The opening sale, and the steadiness which has since been maintained, has exerted a very beneficial effect here. Low quotations for fine tons having been withdrawn, there are now no sellers of average 64’s at less than 26d and at the moment there is some indication that more business is to bo done. “The sharp decline in crossbreds leaves the market here still rather weak, particularly as value shave continued to fall in New Zealand. All the influences recently operating in the crossbred market have been toward depression. Under these circumstances, and in view of the poor state of Continental trade, no marked recovery in tops seems likely.” CHECKING CREDIT DRAIN Reed. 10.5 a.m. SYDNEY, Today. From tomorrow the charge for telegraphic transfers from Sydney to London will be £ 6 2s 6d per cent., one of the highest rates recorded, and the selling rate £6 10s. The increase is made in continuance of the movement to check the drain on London credits. BUTTER MARKET DEAD LONDON, Saturday. The butter market shows no improvement, for although the quantities afloat from Australia and New Zealand are less than a year ago there are considerable stocks in cold store. According to the latest particulars issued by the Empire Marketing Board, which are estimated to cover 96 per cent, of all the butter in cold storage in Britain, the quantity stored on March S amounted to 601,256 boxes. In spite of the reduction by retailers of cash prices to Is 6d a lb. the consumption shows no expansion, and the demand by retailers is hand- tomouth. as in the present position of the market ro one shows a disposition to buy more than is necessary for immediate requirements.