FINANCE AND INVESTMENT
IT may seem odd, but it is happily true, that investors are entering 1940, after four months of war, not merely in a spirit of fortitude but with hope. Nor is the expectation of improvement entirely bound up with mere wishful think- ing about an early German collapse ; there is good ground for taking the view that apart from any really depressing war developments investment values are set on a gently rising course. Weight of money is gradually telling, White- hall has demonstrated its skill in maintaining low interest rates, and news from certain important sections of the industrial front is decidedly encouraging. So we see a firm gilt-edged market as the sheet-anchor for all security values and selective buying of industrial equities, the border- line home rail preferences and base metal shares. I think this sort of activity will go on. • Some of the sceptics will argue that the basis is so flimsy that any material rise would bring out a substantial volume of selling. Perhaps it would, but the result would not necessarily mean a sharp relapse in prices. One of the troubles of recent weeks has been to meet the requirements of buyers without putting up quotations quite dispropor- tionately. Most jobbers and brokers would like to see more stock coming out so that markets could function more freely. Unfortunately, what may happen is that by the time sellers appear the buying will have begun to dry up. From a broad standpoint, however, the investment outlook seems to me to be not at all unpromising. I cannot see any reason for rushing out of fixed-interest into equity stocks, nor are the speculative possibilities of equities exhausted. But war has dimmed the prospect of many companies and infused new life into others. A careful overhauling of investment lists should be one of our first duties on entering the New Year.
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