Financial Notes
QUIETER MARKETS.
THE Budget fulfilled market expectations, and now there has been the almost inevitable reaction in prices. The general public always finds it hard to comprehend why, when favour- able anticipations have been fulfilled, there should not be a further rise in prices. Hopes are indulged, perhaps, that a certain Company will declare a dividend of 6 per cent., and when the dividend is actually announced, instead of a rise there is not infrequently a temporary fall in the prices of the shares. This is simply due to the fact that professional speculators anticipating the increased dividend have bought shares speculatively at a lower level and sold when the good dividend is announced. And so with regard to the recent Budget which fulfilled rather than exceeded market expectations. And the usual profit-taking followed. It is possible that in this instance profit-taking was also stimulated by a recognition of the unsettlement of international politics, while it was undoubtedly accentuated by the last fortnightly settlement revealing a considerable increase in speculative positions. In the absence, however, of unfavourable political developments, I should expect the set-back in prices, especially as regards high-class investment stocks to be brief owing to the continuance of cheap money.
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