Financial Notes
MARKET CONDITIONS.
BUSINESS on the Stock Exchange after the Easter holidays opened in quiet fashion, but with a fairly good tone. The general views of the City with regard to the Budget are expresied in another column, from which it will be seen that grave exception is taken to many of its provisions and, most of all, to the heavy increase in Expenditure. These blemishes, it is felt, must sooner or later have an injurious effect upon the financial situation, but, the mere fact that the Budget is out of the way constitutes a bull point for the markets which for the moment are being helped by cheap money. In some quarters the view is held that one effect of the higher Income Tax and the increase in direct taxation generally may be
' a check to transactions in gilt-edged securities and a spur to activity in the more speculative markets. It would not, indeed, be surprising if the flotation of new international Loans of an attractive character were to give a spur to the better class of Foreign Government stocks. It is possible that even during the present week we may see the flotation of the long-looked-for San Paulo Loan, and, having regard to the auspices under which the Loan is issued, I regard the operation as likely to produce at one and the same time an attractive Loan and an improvement in general financial conditions in San Paulo and in Brazil. Altogether, the present outlook for the Stock Markets is not unfavourable, always supposing that money rates in America do not advance, for it is the prospect of a continuance of fairly cheap money which is really the prime factor in the Stock Markets.
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