Evening star., 1929-12-08
INVESTMENT PEAK
FOR PRESENT SEEN
Ability of Market to Absorb
New Issues Shown
During Week.
BY BYRON SELLER.

DA DA NUN SELAENs
Special Dispatch to The Star.
NEW YORK, December 7.-While
bond prices this week were strong, they
did not make any wide advance into
new high ground, and its Is generally
conceded that the investment market
has reached temporary peak to its re-
v1val so far as prices are concerned.
The new important factors are its
greatly increased ability to absorb new
issues, particularly municipals and the
new high range Of United States Gov
ernment obligations reached as a SEQUEL
to the announcement that the Treasury
would sell $325, ,000,0 900 of nine-month
certificates Of indebtedness at sX per
cent.
Municipal Offerings.
This last development has given q
strong impetus 10 new municipal offer
tngs, and the price at which New York
City will market 100000 of 412s
next wednesday Is consequently ex-
pected to be good one.
The announcement Of such q rate
| stimulated the purchase of all Treasury
issues and generated demand for Fed
eral farm loans and municipalS. Not
| since 1927 has the Government been
able to borrow at such a low rate.
1t comes at q good time, since there
Is at present strong demand for short
term notes and municipals. Over $780,
| 100000 OF short-teTm certificates are
wanted, with 8 to 6 month maturities
the most popular. The auction of such
! issues during the past week has brought
out some strongly competitive bids.
Another factor consequent on the de-
| mand for Short%erm notes is the pres
ent increase in new railway-equipment
bonds. These have been Sparsely issued
for the past two or three years, and the
total for 1929, up to the end of No
vember, OF around $50, 0,000, 900, was al
most three times the total brought out
IN 1923. Since nearly all the railroads
nave construction or expansion pro-
grams In consideration, many new such
issues are expected In the next two or
three months now that the market is
so favorable. There are about $4,000
freight ears on order for delivery during
the first three months Of 1880, and in
addition to American railroad plans al
ready announced, the Canadian Pacific
has on hand plans for the electrifica-
ton Of some hundreds Of miles of road,
which also ought to result in a Substan-
tial equipment issue.
this style of bond Is evidence in the
price secured by the last New York
Central equipment trust. Issued at AZ
per cent, these maturitieS compared
with previous issues only last month
at to SIS per cent.
Recent Issues.
The testimony Is clear that the mar
ket has had q good rally since the end
of the panic effects and for the time
being had discounted the drop in money
rates, the exception being where q COR
poration is in need of some certain kind
OF Short-term financing.
The average for 20 domestic bonds Is
still about three points below the high
Of the year, but foreign dollar credits
are close to their best 1929 level.
During the week there was a total of
close to SITS 100000 new bond offerings.
OF which $40, ,000, 900 consisted of mu-
nietpal loans. The biggest of these in
cluded: Detroit, $28, ,266, 900; Philadel-
phia, $12,s76,000; Province of Ontario,
$50, ,00O, 900, and British Columbia, So
100000. OF the others the New York
Central equipments totaled $5,895, 900
and Chicago & Northwestern con-
vertible issue the balance. The last
named rail description was half sub
seribed to by stockholders before 1t was
offered to the public at par. It's first
appearance on the bond market was the
signal for heavy trading and two single
sales were for 100000 and $3.50, 900,
respectively.
Turning to the foreign department,
many new high prices were registered
during the week. but there we're also
some declines. Generally, foreign loans
responded to considerable volume of
foreign buying, especially from France
and England, where the higher yields
on the American market are the in
centive. This buying was tempered by
local profit-taking.
1t is noteworthy In this respect to
point out that just now a great many
more foreign bonds are being called
than are being issued Such condition
has not occurred since the New York
market hrst broadened its activities in
such credits 10 years ago.
Further Activity Seen.
Brazilian bonds were strong all week,
presumably in response to financing re-
Gently secured and to the fact that
coffee prices have improved somewhat.
Spain Is arranging loan of $50, 900 900
TO cover credits secured In New York
and London last year.
German loans have been much in
demand, a. obstacles in the path of the
eventual eosummation of the Young
plan have been cleared away. There Is
also strong demand from Germany
itself for Its obligations and some Swed.
ish and Norwegian funds have been
brought into the local bond market in
ssarch of German investments.
Generally speaking, traders predict a
two or three year period of bond ac-
tivtty, although for some time 10 COM
they think that the high Yields current
on the stock market will offer strong
competition.
Copyright, 1927