AN OVERSEA TRADE SHARE
Investors. should remember, even if they are not forcibly reminded, that there are two phases in recovery after a really bad depression. In the first phase all surplus earnings are earmarked for repaying the wicked • banks, leaving nothing or virtually nothing for other less dismal uses. Subsequently, when bank debts have been paid off, spending power is released and is reflected in a gradually widening circle of prosperous trade. The transition from the first to the second phase of recovery is, I understand, in progress in Argentina and most other parts of South America just now. Traders and agricul- turists, having at last succeeded in freeing theinielves from the heavy burden of indebtedness incurred during. the slump, are now beginning to enjoy their better fortune.
. I do not know of any official index of South American retail trade, but it is a safe guess that the retail stores are now reaping the benefit of the increase in public purchasing power. For this reason I should expect a company like Harrods (Buenos Aires) to be doing well again after a long period of depression. Associated with our own Harrods, this company has branches in Argentina and in Chile, and has recently . reorganised its capital. Dividends have not yet been resumed on the I2S. Ordinary shares, but earnings must now be improving. The full benefits of business recovery will be more apparent in the next financial year, which begins on September z, than in the year now drawing to a close, so that cautious buyers may decide to await the next accounts before committing themselves to a purchase. Even now, however, the I2S. shares, standing at 9s. 6d., are a promising oversea equity..
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