Financial Note
REPAYMENT OF FOTJR PER CENT. WAR LOAN. MARKETS have again presented the spectacle of rising prices for gilt-edged and other "safety first" securities, while the industrial and more speculative departments have been dull. The events of the week, too, have helped to emphasize these tendencies. Further contemplation of the Government's plan Of redeeming the Four per Cent. (tax compounded) War Loan Ire means of an issue of Four per Cent. Treasury Bonds has confirmed the first impression that the operation is calculated to stimulate interest in the longer-dated securities. For during the next three months the market will be contemplating the liberation of about £75,000.000 of money which will be seeking fresh employment in the hands of investors, while the Four per Cent. Treasury Bonds will, doubtless, go largely into the hands of the banks and Money Market. A good deal Of reinvestment will, undoubtedly, take place beforehand, for the Four per Cent. War Loan, now that it is to be definitely repaid, is practically as good as a three months' bill to the Money Market, and investors can sell it for 1004—that is Practically 10s. per cent, more than they will receive if they wait to be repaid on January 15th, for the stock is already ex- dividend in respect of the dividend due on October 15th. Re- investment of this money seems to be going largely into those Government securities likely to benefit most by a continuance of really easy money conditions, such as the Three-and-a-half r Cent. Conversion Loan and Four per Cent. Consols, while Loans have also advanced. The highest return on any direct British Government stock, however, apart from the Five per Cent. War Loan, is obtainable on the Five per Cent. Conversion Loan which cannot be redeemed at the earliest before May 1st, 1944, and appears quite an attractive security. (Continued on page viii.)
For while monetary conditions May continue favourable for some months to come, they may not always be quite so much in favour of the Treasury as a borrower as they appear likely to be in the immediate future.
A. W. K.
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