CITY AND SUBURBAN
Goodbye to all that, from a City of stuffers and pullers
CHRISTOPHER FILDES
The City split this week into stuffers and pullers. The pullers, led by Michael Richardson of N. M. Rothschild, wanted the great British Petroleum share issue pulled — that is, withdrawn or postponed. They modestly declared an interest. The stuffers, with the chairman of the Stock Exchange notable in their ranks, were for stuffing it down the underwriters' throats. They took their line from President Calvin Coolidge, asked to pull the repayment of his allies' war debts: 'They hired the money, didn't they?' The pullers could reply that Coolidge never got it back, and that it disappeared from sight in the financial collapse which followed his pres- idency, in 1929. At such moments the whole financial system needs to be pro- tected from a contraction of confidence and credit. The point was made this week by John Bolsover, chief executive of Bar- ings' international fund management busi- ness, speaking of the BP issue: 'The danger is that the Government will be taking money out of the economy and out of the stock market at exactly the time when it should be putting it in.' It is certainly a time when London securities firms are leaning heavily on their banks (their bor- rowing is up by one third this year, to £16 billion) and when some banks have been limiting or not renewing lines of credit to them. I repeat my warning of last week, that these are not healthy markets, and that the ordinary investor should resist the temptation to hurry back into them, look- ing for bargains. Too much has changed. October was the month when the market said, with Robert Graves: Goodbye to all that.
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