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LONDON MONEY
MARKET.
Federal Treasurer's State
ment. ..
Melbourne, Feb. "2 .
Cable advices that have been received
from London by the F?dcral Treasurer
(Mr. Bruce) indicate that'the state of
the money market has become distinctly
favourable to loan flotations.. Within
-the last few days the Shell Transport
Company, the -Treasurer has been -in
formed, has placed an issue of £500,000
of second preference shares at par, bear
ing interest at 7 per cent. per annum.
This denotes a very great improvement
on recent issues of a similar nature. A
year ago the interest would have been at
least S per cent. for first preference
shares, while on second preference 10'
per cent would probably have been ask
ed. Another instance of cheaper money
is furnished in respect of a loan of
£850,000 issued by the Swansea Corpora=
tion. According to Mr. Bruce's informa
tion this has been'placed at £98, the in
terest being 5} per cent. It was over
subscribed, and it is already selling at a
premium of £1 7s, 6d. The Siamese
Government has, it appears, issued a 7
per cent. loan of £2,000.000 at' par, and
so rapid was the response that the sub
scription list was closed in fifteen min
utes. A few weeks ago the Common
'wealth issued a.loan in London at £97.
bearing 6 per cent. interest. Mr. Bruce
has learned that this loan already com
mands a premium of £4, while the re
cent New South Wales 6 per cent. loan.
issued at £97, is at a premium of £u
2s. 6d.
Mr. Bruce is keeping in close touch
with financial interests in London, and
has been advised that there is a ver.n
large amount of money available there
for investment. .British export is in such
an unfavourable condition that money
employed in normal times to finance for
eign trade has to find other profitable
outlets, and gilt-edged securities are con
sequently largely sought after. This
would explain to some extent the eom
paratively cheap rates at which such
loans can now he issued, but the ques
tion would seem to be how long will this
relative superabundance of money avail
able for investment last. As trade im
proves, and the demand for money to
finance British exports becomes brisker,
there will probably be a correspobding
decrease in the money available for in
vestment in loans.
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