CHEAPER MONEY YET

Sun (Auckland), Volume IV, Issue 929, 24 March 1930, Page 11

CHEAPER MONEY YET

KEEN BUYING ON EXCHANGE STOCKS ADVANCE AT HOME LONDON, Saturday. The reduction in the bank rate to 32 per cent, and the opinion confidently expressed in many quarters that it will be still further reduced to 3 per cent, next month has had a marvellous effect on tho Stock Exchange, especially on the gilt-edged market, which du ing the last few days has shown activity reminiscent of the boom days of the past. „ , Following the sustained upward movement of tho British funds, which commenced on Monday, there were sharp advances all round yesterday. Compared with a week ago 4 per cent. Consols showed an advance of 2i, Conversion Loan 42 per cent., and advance of 32 and Victory Bonds an advance of 35. Indian 32 per cent, stock, which had been very weak owing to the political troubles, improved by no less than Bi. COLONIAL STOCKS Commenting on the position the ‘financial News” says:—“To some extent the market is professional and profit-taking may cause a reaction. But it is an acknowledged fact that the big financial houses and insurances houses are buying. A notable part in the general advance has been played by Australian stocks and Indians stocks. This ft partly, duo in both cases to the fact that these stocks had previously lagged behind tho general body of gilt-edged securities, but it is also reflected in a real revival of confidence in the stability of the borrowers, stimulated in the Australian case by determined efforts which the Labour Government is making to right the exchange situation, and in the case of India by the petering out of Gandhi’s campaign.” Another finanical expert writes: ‘No doubt a good deal of professional speculative buying has taken place. In some respects it is regrettable, although perhaps inevitable, that the professional operator should get ahead of the genuine investor. A question which the investor is asking is whether the rise is likely to go further and whether money is likely to remain cheap for a prolonged period. I can only say that for the moment indications favour a likelihood of low money rates continuing for some months.” Other writers express similar views. Some even mention the possibility of a 25 per cent, bank rate in the near future.