Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-03-23
INVESTMENT BOND
MARKET IMPROVES
Rise in Prices During Week
Accompanied by Larger
Sales Volume.
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, March 22.-The prog
ress of the investment market during
the past week is best measured by CIV
ing few figures. On the Stock Ex-
change, bond transactions totaled close
to $125, 100000 against ST., 1884, 900 last
week and $47,160,000 in the same week
Of 1929. On Thursday the volume was
the heaviest In four years. The aver
age of so bonds, representative Of the
whole list rose to 0480, against 91.33
two weeks ago.
The immediate cause for this, of
course, is the fact that money Is cheaper
than it has been in five years. A con-
tributing cause Is that large sums of
money have been held out of the mar
ket awaiting favorable conditions, and
the market is now getting part of the
reinvestment demand that normally
should have come its way in January.
Rate Changes.
Time money dropped below the 31a
per cent level for the 90-day term, as
a result of the dropping of the New
York Federal Reserve rediscount rate
the previous week and eight consecu-
tive drops in the acceptance rate since
the beginning of the month. Then the
Bank of England lowered its rate to 3h
per cent on Thursday Another cut in
the New York rate was indicated, but
the Street feels that If stock market
activity continues on its upward course
it may not take place Just now.
Another factor that aided the rise in
prices was that for the first time since
1928, there was a hint of a scarcity of
bonds, especially high grade municipal
and other legal descriptions. Despite
SI0W0AcC OF
were moved in the past quarter, the
first few days of active bond buying
cleaned the dealers shelves of every at
tractive offering. Quick to realize the
situation, SPECTATORS came into the
market and picked up second grade de-
scriptionS to hold for a profit. Investors
not able to buy just what they wanted
for their portfolios turned to the higher
yield types. Foreign issues are brought
out and marked up. Life insurance
companies and savings banks both were
large buyers.
The net result was that bonds of all
classes advanced to their highest levels
of this year and at the end of the
week were approaching their high levels
of 1928. Many issues, as a matter of
fact, topped their best 1929 prices and
are quoted now on a basis comparable
with the strong bond market Of early
1928.
Effect ON u. s. Issues.
For example, the eight active long
term United States Government issues
closed the week at an average of
l04 1928, against 104.332 last week and
their 1929 high level Of 103.S82. These
issues were most sensitive to the lower
ing Of the rediScount rate and by their
at the end of the week pointed
to further rate cut. Ten high-gTade
railroad bonds stood at 95.45, compared
with 94.46 last week and their best
price in 1929 of 95.03. .'...,
Many popular public utility issues !
touched par or better for the first time |
since 1928, but the average of ten of |
these did not quite reach the 1929 level, |
at 100.03, compared with 1897 |
last week and the 1929 high of 1903.
The advance of the junior railroad |
bonds brought group Of them to an !
average of 90.71, against 1873 last week, |
and ten Seni-Speculative industrial is |
sues reached S7.12, compared with 64.2 |
a week ago. This last group IS the |
only one that is still far below its |
high level of 1929. which was $500.
Industrial bonds, apart from foreign |
credits, reacted more widely than did |
the rest of the list to the forced selling |
Of last Autumn and have been the last |
group to come back.
Foreign bonds, having advanced |
strongly and steadily during the past |
month or five weeks, naturally did not |
improve so markedly. but group Of |
them reached an average of 1o0.71, |
with 99.T5 the previous week |
and the 1929 high level of 1913.
New issues during the week did not |
bulk large enough to have an appreci-
able effect on the markets rise. The |
total was about $4,000 900, compared |
with 100000 the previous week.
However, It Is interesting to note that /
sos, 000, 900 Of the weeks flotations con-
sisted of foreign bonds. The City OF
(Finland) issue, successfully |
marketed on Wednesday, was the signal |
for the release Of number Of foreign |
dollar credits. The most important ,
item was 100000 900 Royal Dutch /
Petroleum issue of per cent deben-
lures, with stock warrant options. These |
debentures were offered at 89l2 and at |
once advanced a point above the offer
ing value. Another interesting foreign /
offering was 100000 Rhine West
phalia Electric Power Corporation IS.
put out at 80. An outstanding issue
Of the same company of comparable
term, coupon and stock option feature,
declined 2 points to meet the price of
the new debentures. 1
(Copyright, 1897