TRADE REVIEW.

Taranaki Daily News, 19 April 1922, Page 5

TRADE REVIEW.

A CHEERFUL TONE. LOWER BANK RATE. BUTTER POSITION. By Assn.—Copyright. London, April 15. The Stock Exchange closed for the holidays in a most cheerful mood, thanks to the Bank of England’s “Easter gift” in the shape of a reduction of the bank rate, which surprised everyone, as it was not expected till next week. The markets did not respond immediately the reduction was announced, but later there was considerable buoyancy. Most prices closed at top, with business broadening in every department. Even before the reduction the markets had been unusually active, in marked contrast to the dullness which is generally apparent on the eve of the Easter vacation. All departments were brisk, with prices tending upwards. This was most noticeable in investment securities; but speculative stocks were also receiving support, largely of foreign origin.

SPECULATIVE ACTIVITY. There seems a prospect of an early revival in speculative activity, for the Stock Exchange Committee announces, subject to confirmation at a meeting to be held on May 15, that it will repeal the temporary emergency regulations, which have been in force since January, 1915. If this is confirmed it will mean that the Stock Exchange will be reverting, probably early in June, to pre-war .practices regarding fortnightly settlements and contangos—except in British funds and colonial and provincial Government securities, which will be excluded from the new arrangement because it is expected that any huge increase in the volume of business in giltedged. securities as a result of war issues would make business unwieldy. This exclusion is meeting with much opposition from members, and may cause the committee to postpone confirmation.

BANK RATE AT PRE-WAR FIGURE.

The reduction of the hank rate to the figure at which it stood at the declaration of war has been hailed with satisfaction in trade circles. It is regarded as proof that the period of dear money has terminated, and is expected to stimulate trade activity, in which a revival has alredy commenced. All that is wanted now is reduction in the income tax. A few weeks ago it was confidently predicted that the Chancellor of the Exchequer would make a substantial reduction in the tax in view of the possibility of an. early general election. Now the Government’s opponents suggest that the election will not be till late in the year, therefore the need for any reduction in the income tax does not exist; but the public is still hopeful. THE BUTTER MARKET.

Although butter prices have again fallen, there is no reason for alarm, as the position is inherently strong. The only cause of the relapse was that prices had been raised too rapidly and reaction was inevitable. Butter supplies from all sources seem hardly likely to suffice for the consumptive demand. and traders anticipate a keen inquiry after the holidays. Home production is still backward, despite plentifulness of milk, and but little butter is likely to come from the Continent, which is still buying or our market, orders even coming from France. Aus.-N.Z. Cable Assn.