Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-08-24
INVESTMENT BOND
MARKET IS STRONG
Public Utilities and Legal
Rails Especially in Demand
During Week..
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, August 23.-The tech
nical position of the investment market
was further improved during this week
because of the continued absence Of
any stable amounts of new bond is
sues, together with the low rates for
money and the reluctance of many in
vestors to put their money in stocks,
until the business horizon shows q
larger streak of clear sky ahead.
The list ended the week at the high
est level since early in 1928. Standard
Statistics Index of 80 bonds, which is
based on the average prices for the
year 1926 adjusted to the base 100, stood
at 1OI1, against 1909 at the end Of
last week. This increase is not wide, but
since 1t covers a cross section OF the
entire domestic market and must make
allowances for the unchanged levels OF
Junior railroad bonds, and the weak
ness of some of the semi-speculative In
dustrials, the strength of prime issues
is apparent.
Chief Advances.
The chief advances have been in
public utilities and legal railroad mort
cages. The first named had their ad-
vance in previous weeks, but last week,
with the investment demand getting
ever keener as new issues dwindled and
dealers moved out what stock they had,
attention turned to. railroad Securltles
despite the steady drop in railroad
earnings during the past half year and
more.
The week saw a total Of only $28,-
539. 500 bonds offered, against $50, 767,-
600 in the previous week and $50, 5l5 900
in the same 1929 week. OF this weeks,
nearly half consisted OF an issue OF
Denver. Colorado Refunding Water "A
per cent bonds, due serially from 1881
to 1867. They were publicly at prices TO
yield 2.75 to 2.95, according to maturity
1t is only matter OF months SINCE Den
YER Judged the market as not ready TO
receive its bond offering and postponed
its issue, but the city sold the present
issue at a cost Of 4.01 per cent, close
to q record price for that and many
other Western cities.
THE market, while absorbing strong
demand from institutions and 1nolVlo-
uals. has also had to digest selllng py
those who believe that with prime bonds
anywhere from 4 to points ABOVE Inc
low levels of the year, and with stocKs
at their present low levels the polnt mas
been reached in the security cycle wnen
nrofits In bonds should be realized ana
good common stocks bought with the
proceeds. As a matter of fact, on tues
dav and Wednesday, when stocks ad-
vanced strongly and consistently unoer
a LIGHT volume of trading, bonds were
sold in stable blocks for this pur-
nose, but the movement ended When
stocks hesitated on Thursday.
Consistent Gains.
This however, did not actually lower
bond prices which have shown con-
sistent day-to-day improvement. be-
cause savings banks and trust 1unos,
which are barred by law from invest
ment in stocks, have provided Such
volume of business as to keep legal is
sues at scarcity values. Much the same
may be applied to insurance companies,
though their portfolio requirements are
broader.
This unabated demand will probably
result in continued strength III bonds,
even If money rates go higher In the
Fall. which Is considered normal TO the
season, This might seem paradoxical,
but at current rates great many bonds,
notably municipals and railroad equip
ment trust certificates, are already SELL
ing out of line with money rates.
Next week does not promise anything
startling In the way of new issues
either. There is about $4,000 900 of
public utility financing in prospect, but
this will probably be put over till Sep
tember. Financing requirements are at
a low ebb, because Of the huge amounts
of bonds that were put out in the first
half of the year, and even the high
prices of today's bond market cannot
attract municipalities to increase their
bonded debt, nor convince corporations
that now is the time to secure new
capital and build needed or projected
extensions.
In September there is little likelihood
of any large amount of new bonds. An
indication of this may be found in the
fact that bonds and notes falling due
in that month amount to $72, 1882, 900.
Practically the whole amount has been
provided for and will not require more
than limited new or refunding financing.