MARKETS AND MONEY.
Although the Stock Markets as a whole show signs of returning confidence, in the absence of further heavy with- drawals of gold from the Bank of England in the last few weeks, it is evident that hopes of easier money conditions have now practically disappeared, and this has been reflected in rather lower prices for the longer-dated securities in the Gilt-edged market, and some exchanging from these securities into 5 per cent. War Loan for the sake of the higher return. When money becomes cheap, investors appear to fight shy of the War Loan because the Government has the right to repay it at par after 1929, but it is clear that only a protracted period of very easy money conditions would permit of appreciably higher prices for longer-dated securities and justify a conversion operation in which the 5 per cent. War Loan holder could be given definite notice of repayment and be made to take cash for a security giving a much lower interest yield. Consequently such stocks as the 31 per cent. Conversion Loan and the 4 per cent. Funding Loan have been slightly dull, while the 5 per cent. War Loan has improved.
A. W. K.
Previous page
