'Financial Notes

THE RISE IN COMMODITIES.

THE outstanding feature of markets following upon the Christmas holidays has-been the sharp rise in prices of com- modities, a matter to which I make a further reference in a previous article dealing with general prospets tor the Istew Year. While the advance in commodity prices has been general, including Wheat, Cotton, Rubber and Copper, it has 'been in the last two commodities that the rise during the last few days has been most striking, and as a consequence market activity has centred very largely in the shares of Rubber companies and in shares of the base metal mines. The price of Rubber has risen to over ltd. per lb., being quite the highest quotation for some years, though it may be noted that as recently as 1929 the price was Is. 10. per lb., the highest point touched since the War having been 4s. 8d. per lb. in the

year 1925. . • * * • *

&rocas REDUCED.

The rise in the price of Rubber during the last few days has been accentuated by something like a " corner" in the com- modity, warehouse stocks in the United Kingdom having fallen by nearly 1,200 tons, so-that at 79,000 tons the stock is less than half the total of a year ago. Moreover, the sudden .demand for spot Rubber and for future deliveries has caused (Continued on page 32.)

Financial Notes

(Continued from page 30.)

manufacturers and consumers to look well ahead, while during recent weeks German and other foreign buying has given a stimulus to the market. Increased supplies, however, although they may take some time to correct the present shortage, can be reckoned on with confidence, and the fact that there is now a considerable margin between the price for immediate and future delivery for Rubber suggests that it may not be wise to calculate the profits of Rubber companies in the immediate future upon the price prevailing at the moment. This, indeed, has been recogniSed to some extent (luring the past week, for while Rubber shares have risen the advance has not been proportionate to the jump in the price of the commodity, although a stimulus to the market has been supplied by a certain amount of French buying.

Tim RISE IN COPPER.

Quite as remarkable, however, in its way, as the rise in Rubber has been the strength of Copper, which rose very sharply last Monday. The stimulus now seems to be coming from the other side of the Atlantic, and the American export price for electrolytic Copper is appreciably above the domestic quotation. This, it is thought, may lead -American producers to declare another advance in the American price, a possibility which has affected the American market during the past week. As in the case of Rubber so with Copper, the rise is the more striking as the present output of Copper producers of 103 per cent. is against 70 per cent. some three months back. Here again it may be well to remember there is necessarily some lag before the extra output is felt in the market. On the whole, however, having regard to trade conditions and trade prospects, it looks as though the present price of Copper would be well maintained, with possibly some further advance in the New Year.

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BANKING IN CANA.DA.

The latest Report and Balance-sheet of the Royal Bank of Canada gives indication of a revival of business activity in Canada. The Deposits from the public show an increase of 871,000,000 and there was an increase in the cash. It is true that Loans and Advances show some decline, but that, it is understood, was due to the liquidation of the Wheat loans consequent on the realisation of the carry-over of the last few years. The Balance-sheet is a strong one with liquid assets representing over 60 per cent. of the total liabilities to the public.

INV-ESTMENTS IN GERMANY.

Quite the most interesting feature of the speech of Sir Edmund Davis at the recent Annual General Meeting of the South-West Africa Co., Ltd., was his reference to the holdings by the Company of investments in Germany. The company has a considerable holding in the Gesellschaft ftir Elektrische Unternehmungen-Ludw. Loewe and Co. A.G., which is one of the most important German industrial concerns controlling for all practical purposes the Hirsch Kupfer tmd Messingwerke with a large interest in the Allgemeine Elektrizatsgesellscluift. It has a capital of Rm. 80,010,000 and paid a dividend of 6 per cent. for 1935. In quite a number of other important German industrial concerns the South-West Africa C'ompany has also important holdings, and concerning them Sir Edmund Davis spoke hopefully.

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AVIATION PROFITS.

A year ago the dividend on the Ordinary shares of Fairey Aviation Ltd., which had for two years previously been at the rate of 5 per cent., was raised to 10 per cent., and for the past year that dividend is maintained. The profits increased materially from about £89,000 to £60,000, but £19,000 has been transferred to Income Tax Reserve, and it should be noted that the profits for the year included £5,480 from the realisa- tion of investments. Moreover, the Report shows that one subsidiary sustained a loss for the year. The investments in subsidiaries are shown in the Balance-sheet at £42,149, but the amount lent to them was no less than £729,000. In considering dividend prospects it must also be pointed out there was an issue of 1,000,000 new shares at 12s. Od. per 10s. share. These did not rank for the dividend recently declared, and to maintain them for the current year will cost another