RUBBER'S RECOVERY PROSPECTS
I hope the International Rubber Regulation Committee will not yield to the clamourings of the speculators and do anything hasty in the way of quota amendments to stimulate a price recovery. Quite a lot of small and for the most part ill-informed speculators have burnt their fingers in Mincing Lane, and there is no point in trying to correct the over-bought position by quota changes until the weak " bulls " have cut their losses. So far, the Committee has held its hand and having been thwarted in its task of ironing out fluctuations mainly by the operations of speculative syndicates, it is not likely to be stampeded into action to save the speculators' pockets.
Rubber stocks have risen appreciably since the spring but most of the recent increase must have been envisaged by the Committee and is a natural corollary of the stepping up of the exportable allowances. Provided American consump- tion holds, as I believe is very probable, the -position should be readily controllable at the end of the year, and a price of 9d. per lb. should be well within the limits of practicability when the speculative shake-out has been completed. Mean- while, rubber shares have been unduly depressed by the weakness in Mincing Lane and justify purchases at today's low prices. If rubber averages 9d. per lb., shares such as North Malay at zs. and Anglo-Java at is. I1c1. are priced to give an earnings yield of over 10 per cent.
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