BRITISH TRADE BOOM.

Taranaki Daily News, 21 February 1922, Page 5

BRITISH TRADE BOOM.

MARKED ACTIVITY. ENORMOUS TURNOVER. BANK RATE LOWER. By Telegraph.—Press Assn.—Copyright. rp. London, Feb. 18. ine past week has been one of extraordinary activity in the gilt-edged department of the stock exchange. The upward movement began when the Government announced the suspension of the issue of 5 per cent. Treasury bonds. This was regarded as indicating a reduction of the bank-rate and when the reduction was made it was an even more potent influence. Bankers immediately reduced deposit rates to 2J per cent, and, with the knowledge that enormous sums of money were still unemployed in trade, buyers soon came along for all Government securities. Yesterday the movement culminated in a degree of activity quite unprecedented. In country markets prices rose by leaps and bounds and dealers were surrounded by .brokers clamoring to buy. The turnover was enormous and exceeded anything within meiqory. The scene the usual staid consol market was reminiscent of the rubber market in boom times. Consols, local loans and war loans were in the greatest demand, but colonials participated fully and brisk business was done in many foreign stocks by investors seeking a higher yield than their own Government stock returned. GOVERNMENT BROKER BUYING. It is reported that the Government broker was buying, which revived the idea that the present rise in gilt-edged securities is part of a big movement to raise prices to such a level as to permit the flotation of a big funding scheme on favorable terms. It is noteworthy that all Government issues made during the war period now stand at the issue price or at a substantial premium, the exceptions being the war loan at 3J per cent, issueu at 100.

The recovery in most of these stocks is extraordinary. Compared with December 31, 19x0, consols are 11 points higher, 3| per cent, war loans nine points, 44 per cent, war loan 12$ points, 5 per cent, war loan 13£ points, the funding loan 12J points, victory bonds 13% points. The great strength of gilt-edged securities has had a favorable effect on the industrial share market, which has become quite cheerful. Although there is -no appreciable expansion of business noticeable, prices generally developed faborably. There was an all round improvement In bank shares and the good recent demands for first-class industrial debentures has become even stronger. RUMORED WHEAT • COMBINE. A wheat market correspondent, commenting on the fact that the prohibition o*f shipments of Indian wheat ceases on March 31, says: “We may have India offering free wheat from the opening of her shipping year oh May 1. The price is difficult to foresee, but it suggests a range from 52s 6d for common red to 60s for finest white. This supply should mean cheaper corn, but it is countered by a very extensive organisation holding wheat in Canada, Australia and the United States. It is ?uestionable if American and Canadian armers will be able to hold firmly with success, because Australia is a fiercely competitive seller and since the New Year has actually sold the unprecedented quantity of 25,700,000 quarters, mainly to England. It is rumored that a great combine, with its seat in Canada, has succeeded in getting control of this competitive element, so it will be possible to hold for agreed prices the remaining wheat surpluses in Canada, the United States and Australia. This would be the biggest wheat corner on record.” THE METAL MARKET. Metals generally are dull. Tin is depressed despite recent Ai lerican purchases of unusually large quantities. Owing to the prospect of a substantial increase in the visible supplies at the end of the month prices are reaching an unremunerative level for the majority of mines. A further decline will doubtless cause an eventual curtailment of production. The demand for copper, both for home and export, has been disappointing, but the lower prices prevailing may attract buyers. A reasonable low price level is likely to expedite many schemes, such as railway re-equipment and electrification, and consumption on a quickly and steadily improving scale is generally expected.