The Waikato Times WEDNESDAY, MAY 25, 1938 LONDON STOCK MARKET

Waikato Times, Volume 122, Issue 20507, 25 May 1938, Page 6

The Waikato Times WEDNESDAY, MAY 25, 1938 LONDON STOCK MARKET

! abom , n ]me i llu . s^ei sa ' c l to have received some information •iflW.tin ' r '' 0< - " nß ? e ™* campaign in London which is adversely I ohanoA Tl "T" °* *' e " ea ' auc ' scr >p on the London Stock Ex--1 lv ft,! r , \ , shown a tendency to ease of late, and apparent- ' , ° n Labour journal, the Daily Herald, expected that there o I d be a prompt recovery when the substantial surplus in the naa ceounts for 193t-38 was announced. It was disappointed i ‘/ . mentioned that certain influences were working against the Do- • iiii'in i sues. The fall has not been heavy, and, where it is popular 1 mako comparisons, New Zealand loans arc as favourably */• J usf,< ilian issues. There are some exceptions, but the naigm may not he of importance because so many factors can in- ' Nh'i 6 * P ™ a ! ke ! s ' London prices taken generally will reflect the . n foircc v ich investors have in the soundness of the Dominion's ! “ Mlr 1 orders of large parcels have to sell, prices invariably end to go downward. It can bo shown, as Mr Savage has stated, that the trade between Xew Zealand and the Mother Country has »ecn \er\ eat\, and while the tendency of imports to increase may ia\e a tie effect of reducing funds available in London there is still a good balance. At the end of March the banks held overseas funds, on New Zealand account, amounting to £26,564,000, and the Reserve Hanks sterling reserves, included in that total, came to £16,929,000. ie aggiegate is nearly £8,000,000 below that of the previous year but the current quarter should see it built up steadily for there is still much produce to be marketed.

The Prime Minister and his colleague, the Minister of Finance, naturally are concerned as to the overseas credit They know that whoever is in power as a result of the election the question of converting a very large maturing loan must be faced. The amount in'o\ed is £17,173,000 and once that has been dealt with apparently there will be no further loans maturing in London until 1944, although there will be one which could be dealt with at the option of the Government in 1942. The conversion of the big loan will be of great impoitance and nothing must be allowed to affect adversely the credit of the Dominion. It is for this reason that the less heard about kicking over the traces of financial orthodoxy the better it will be. There may be certain factors which could be turned to good account in connection with the loan transaction. The British Government will be doing everything possible to keep money rates stable at a lt>w lex el, for it must borrow large sums for its defence programme. The return to the investor will not be particularly attractive, so that a New Zealand loan offering slightly better terms, and even then probably representing a saving in interest to the Dominion, should be an inducement to the present holders of the scrip. Perhaps there is no need for immediate anxiety about market movements, and the statement made by the Prime Minister, that the Dominion would meet in full its overseas commitments, will be endorsed by people of all shades of public opinion. The credit of the country is a matter above political controversy.