FINANCE AND INVESTMENT
Tifis week's behaviour of the stock markets has been little short of remarkable. With a crisis in full swing in China prices have not merely held their ground but rallied sharply over a broad front. As usual, gilt-edged have been well in the lead and home rails and first-line industrial ordinaries have not been far behind. What is the explanation? Partly, of course, it is technical. When there is no " bull " account to be liquidated the " bears," who are fairly numerous now- adays in relation to the meagi e total turnover, have to look to genuine selling by investors to bring any substantial fall in prices, and the investor is not obliging. At no stage of the Tientsin trouble so far has there been any really heavy selling and most of the liquidation which has been seen appeared to be traceable to Continental sources. So one can truthfully speak of the rock-like qualities of the British investor.
Here, of course, one has the measure of the steady im- provement in recent months in investment morale. It is based partly on our solid rearmament progress and partly on the alignment of Peace Front forces, both of which fortify hopes of an ultimate solution of political problems by negotiation, and in any event help the investing public to resign themselves, either hopefully or despondently, to seeing things through in the stock markets. What I should like to see next—and I fancy things are already beginning to move in this direction—is the emergence of a more positive attitude among investors, which will justify them not merely in holding on to what they already have but in utilising surplus funds. The gradual reawakening of the new issue market and the success achieved by several recent offers suggests that this will to get on with the job is developing. I see no reason why it should not develop much more in the coming months.
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