Stock and commodity markets

Media

Part of The American Chamber of Commerce Journal

Title: Stock and commodity markets
Creator: Hall, A. C.
Language: English
Year: 1949
Rights
Fulltext: and a drop of 50% from a year ago, in the export prices of copra), the value of exports for the first 6 months of this year decreased by P66,000,000 com pared with the same period in 1948. This figure compared with the drop in value of imports of only P33,500,000. The other principal contributing factor to the continued decline in the International Reserve during July, was the comparatively limited amount of dol lars received from the U.S. Treasury, which funds cushion the effect of the adverse trade volume. On August 12, the Central Bank notified the banking community that the Secretary of Finance had issued a directive to the Treasurer of the Philip pines that henceforth the obtaining of a license from the Foreign Funds Control Office was no longer re quired for remittances abroad. Previously, such licenses were required for remittances in excess of $2,500 monthly for other than payments of imports. The Central Bank has recently released the fol lowing comparative figures for the period January through May, 1949. MONEY SUPPLY* Currency Deposit Net Money Total Deposits, National Savings Time Treasurer Deposits Deposits Year and Month 1948 Dec............ 526 607 ' 1,133 22 227 22 .1949 Jan............ 572 617 1,189 16 235 23 Feb............. 571 589 1,160 16 236 24 Mar........... 571 556 1,127 1,157 17 237 27 Apr............ 588 569 17 236 28 May ........ 552 549 1,101 16 237 28 Money supply consists of currency issued, _____ ___ ______ ______ .. ............................ .......... —...... banks; plua the peso checking-deposit liabilities of banks, excluding the national gov ernment deposits and interbank deposits but including unused over draft lines. During the past month there has not been any alteration in the rates at which the Central Bank buys and sells to commercial banks, nor in the rates between which the banks are permitted to quote to clients. For prime business, banks generally are quoting Telegraphic Transfers 201.25 selling, and 200.625 buying. Stock and Commodity Markets By A. C. Hall A. C. Hall Company New York Stocks. — The advance, which began on June 13, has continued to make headway during the past month, with chemicals, foods (including sugars), and oils amongst the best-acting issues. Leading automobile stocks showed little response to record-breaking first-half 1949 earnings. Steels marked time as Wall Street tends to await the report of the Presidential fact-finding board on the steel wage situation. As noted last month, monetary influences have continued to exert pressure toward lower yields for medium and long-term high grade bonds. This tendency is likely also to have a firming effect on the best quality common stocks. Market fluctuations during the period, as mea sured by the Dow Jones Averages were as follows:— July 2.1 High Low August 19 Industrials ............... 174.59 182.02 174.53 181.16 Rails ......................... 44 87 47.72 44.84 46.84 However, the movement of the averages is not too reliable a guide at the moment, as the market is a very mixed affair with numerous stocks moving against the trend of the averages, both on declines and advances. Recent business news indicates that with con sumption in many lines continuing to run ahead of output, inventories have been reduced to the stage that some shortages have appeared. This has resulted in satisfactory new buying and an increased rate of production in a number of industries. Other strong spots in the economy include the continuing high rate of automobile production and building construction. Offsetting these favorable factors in the business picture, are renewed wage demands in the steel and automobile industries. It is generally felt that fur ther wage increases or any prolonged strikes in ma jor industries at this time would seriously disrupt the progress already made toward a healthy peace-time economy. In the face of many uncertainties, it is not sur prising that financial opinion is very divided on the market outlook. According to Dow Theory, the cur rent advance is a secondary reaction in a primary bear market. A leading statistical service feels that the November-July business recession has only ac complished part of the readjustments which are need ed. On the other hand, another equally prominent stock review has held and continues to hold the view that the recession would be relatively mild and brief, although admitting the possibility that some jolts lie ahead before the economy gets out of the woods. It is the writer’s opinion, based on a study of the market action of a large number of individual stocks since 1946, that share prices, for the most part, have already completed their post-war adjustment, and, as usual, ahead of the business picture. However, ‘having advanced uninterruptedly for nine consecutive weeks, the market must be considered vulnerable to any unfavorable new developments in the near future. /COMMODITIES. — The Government report as of August 1, estimated a further reduction of 57,000,000 bushels to 1,130,000,000 bushels as total wheat production. It is anticipated that larger amounts will enter the loan than last year, thereby creating a tightening of supplies later on in the year. September Chicago Wheat was quoted at $1.98% against $2.02 % last month. There was a small in crease in estimated total production of Corn as of August 1. Cash demand continues good but abund ant supply is a depressing factor on Futures. Sept ember Chicago Corn was $1.21% against $1.29% the previous month. Cotton futures were slightly higher on good domestic and foreign demand with New York October closing at 29.85 as compared with 29.71 a month ago. The present sugar quota is caus ing a tighter statistical situation; September New York #5 Contract improved to 5.44 from 5.38 last month. MANILA Market. — There was a good followthrough to last month’s advance in well placed mining issues, but the sharpness of the advance car ried the market into an overbought position, and vul nerable to profit-taking latterly. An unfavorable de velopment during the past few days has been the slower demand for gold in the local market as a re sult of the deteriorating position in South China. 388 This is of major importance to the local gold indus try in view of continuing high costs. It remains to be seen whether this is a temporary or permanent state of affairs. If the latter, then profit estimates of local gold mining companies in future will be subject to downward revision. In the Commercial and Industial section, selective demand for Sugar issues has been a feature. impersonal expression of pesos and centavos cannot accurately gauge the human suffering involved nor the overall loss to the Philippine economy. This staggering fire loss and burden to the Phil ippines should be of concern to all the people, for in one way or another they affect all the people be they taos or captains of industry. Mining Shares Electric Power Production Manila Electric Company System By R. J. Baker Manila Electric Company ■1949 1948 January......................... 33 745 000 27 301 000 February........................ 31 110 000 26 021 000 March............................. 34 776 000 26 951 000 April............................... 33 048 000 26 871 000 L O May................................ 34 453 000 28 294 000 w June................................ 34 486 337 29 216 000 £ July................................ 35 726 123* 31 143 000 T August........................... 35 381 500** 31 993 000 September...................... 32 012 000 h October.......................... 33 943 000 November...................... 32 661 000 R S December....................... 35 104 000 Over-the-counter business in mining stocks was again principally confined to Benguet Consolidated, with about 22,000 shares traded between high P4.75, low P4.35, close P4.45. Other business included 10,000 shares Taysan “A” at 12 centavos In Commercial issues, 100 shares Kabankalan Sugar were reported at P85, also 4,300 shares Manila Broadcasting at 1.30 and 340 shares Victorias Milling at P155 and P160, with almost all business at the latter price. TOTAL ......................... 361 510 000 * Revised ** Partially estimated The Caliraya Hydro Plant was shut-down for the period August 14-20, and we estimate a 1,200,000 KWH was not used during that period due to our in ability to carry the load with the remaining generat ing equipment. The increase over August, 1948, was 3,388,500 KWH, or 16%. Insurance Victor H. Bello Supervisor, American Foreign Insurance Association RECENT investigations by Government entities into alleged arson anomalies should be applaud ed by all concerned. All concerned in this instance means not only those bodies appointed to uphold law and order or fire insurance companies but the entire citizenry of the Republic of the Philippines. Arson is a despicable crime. Perhaps more de spicable and onerous than premeditated murder, in juring as ’it does in most instances the innocent stranger. The magnitude of such a crime is recog nized throughout the world and is prosecuted by law enforcing bodies with such vigor that the crime of arson in most countries is rare in comparison to other major crimes. The Philippine economy today is burdened with a fire-loss ratio that it can ill afford. Manila alone, for the fiscal period ending June 30, 1949, suffered fire losses in excess of P10,000,000, or a per capita loss of P7.25 based on a population of 1,500,000. This Real Estate By C. M. Hoskins (0/ C. M. Hoskins & Co., Inc., Realtors) REAL estate transfers in Manila during August totalled P2,228,597, compared with P3,019,784 for the month of July. Mortgages recorded amounted to P4,924,841 for August, against P12,446,530 for July. Cumulative totals of sales for the first 8 months from 1946 to 1949 were as follows: Januar-July 1946 ...................................................... P27.926.910 1947 ...................................................... 47,356,765 1948 ...................................................... 39,277,629 1949 ......................................................... 25,306,764 City of Manila real estate statistics seem to be losing some of their value as an index to metropo litan real estate activity, due to the steadily increas ing volume of sales in other portions of the Greater Manila area, such as Santa Mesa Heights, New Ma nila, Diliman, and Mandaluyong. These sections are capturing a substantial share of the residential pur chasing power of the metropolitan community. 389