MARKETS UNDECIDED ON MIXED INFLUENCES

Far East News Counters Wall Street Tonic
By Our City Editor
The new Stock Exchange Account opened on Monday last with mixed influences, the tonic of the week-end spurt on Wall Street, and the further scramble for gold, being neutralised by renewed anxiety over the Far East situation. The result, on the whole, was a generally steady tone, but no expansion of 'business. However, with the holiday season still at its height, it is impossible to gauge the influence of cutrenl factors on investment opinion.
Principal interest during the past week was provided by the Foreign Exchange and bullion markets, which have been the centre of activity resulting from continued heavy demand for gold and the dollar. Flight to the dollar, and the resultant fall in sterling, was accompanied by renewed rumours of early currency devaluation, despite recent official denials of any readjustment. At the same time, fears of the world political situation prompted heavy Continental buying of gold, which, due to the improvement in the dollar, has risen to around 142s. 71d. per fine ounce— the highest price since March, 1937.
It is no doubt due to the restriction on enterprise exercised by the holiday season that the recent intensive hoarding of gold has failed to find much reflection in the share market, but it is generally expected that compensating activity will develop in the near future.
The welcome improvement in the unemployment returns for July failed to influence industrial issues, but it is a further promising omen, particularly in the case of the textile industry, which has shown a very sharp improvement.
Copper Prospect Set Fair
Careful observance of commodity and metal price trends often offers the most reliable guidance as to the prospects for representative shares. Advance hints obtainable in this way provide an opportunity of obtaining a cheap interest before i112
provement is fully reflected in the share market. It is frequently the case for shares to lag behind the trend of their governing commodities, the reason being that initial movement in the latter is generally the result of anticipatory operations by speculators, who deal first of all in the basic material; it is only when they have taken full advantage of the rise or fall in this, that they transfer their attention to the shares concerned. If few lay investors take advantage of this " follow-through" price movement from commodities to shares, it is because of the general reluctance to buy in a neglected market.
Of all raw materials, that with the most promising price prospects at the moment is copper. Due to purchases for armament purposes, notably from Germany and Russia, this year has so far witnessed record demand for the metal outside the United States, although consumption would in any case have improved on account of the steady expansion of the electrical industry. American statistics for the metal, however, still hold undue influence over the price trend, as can be seen from the recent rise from £34 to nearly £42 per ton, largely as a result of Wall Street's new-found strength.
Although, superficially, American statistics have not looked too good over the past six months, the position is largely explained by the fact that, due to hand-tomouth satisfaction of industrial requirements, consumers' hidden stocks have fallen abnormally low. In view of this fact, there may be a very rapid improvement in the American position.
Meanwhile, world production and consumption are evenly balanced as a result of the recent decision of the International Restriction Committee to enforce a 10 per cent. cut in the quota. The metal is now by no means plentiful, so that a further early improvement in price is regarded as probable. The best copper shares. such as those of the Northern Rhodesian group, should pay to hold during the autumn. Among lower-priced issues, I favour Messina (Transvaal) Development 5s. shares, at present around 14s, 6d.
Hints from the " House"
The only instructive movement in gold shares last week occurred among West Africans, several of the favourites being in good demand. An important firm of brokers appeared in the market as buyers of Mariu, while Aristons, mentioned here a fortnight ago at 9s. 9d.. were an outstanding feature of strength at close on lls.
I understand that an important statement is expected shortly in connection with Mashaba Rhodesian Asbestos, the Is. shares of which have recently slipped back to around 10d., at which they are thought to he worth acquiring as a long-shot. Powerful American asbestos interests are said to be negotiating for the entire output of the Company's quarry on a longterm contract, and may provide the necessary working capital to start up operations.