Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-03-09
FINANCIAL
PROSPECT IS NOTED
Small New FIotations and
Rising Security Prices Held
Good Signs. :
Special Disbatch to me star.


Special DISPATCH to The star.
CHICAGO, March 9.-The combina-
ton of rising prices In the security
markets and an extremely low total of
new financing IN February serves as a
basis for an optimistic outlook in the
financial field. according 10 the monthly
investment review Of Lawrence Stern q
Co.. investment bankers, OF Chicago and
New York
The review. based on reports from
leading financial institutions through
out the country, ascribes the firm
tendency of the bond market through
out February in large degree to
the realization that demands for Gov
eminent financing have proved to be q
lesser factor than had been anticipated
Another favorable factor in connection
with the bond market, the review points
out, Is the restricted volume of current
offerings, which contributes toward a
scarcity value" for high-grade bonds.
This is confirmed, It is stated by wide
spread reports Of low inventories of
high-grade bonds on dealers shelves.
In the stock market" the review
said, there had been some apprehen-
sion that the February advances may
PlONC W AAdfC DcCn EdIlQ. however,
although reaction OF greater or lesser
proportions would not be surprising,
there seems no reason TO question that
the present level represents a point
within the zone of accumulation for
the long-range buyer"
New Security Offerings.
New security offerings in both bonds
and stocks" said the review. were very
small throughout the month of Febru-
airy. The total volume of bonds and
stocks for the month, $3.50, 42I 1888, ap-
proaches the low level registered last
December and represents one of the
quietest months in recent years. OF
this amount bond financing aggregated
Sle5,833 ,90S and stock issues totaled
S34, 587 ,425.
1.-THE small volume Of stock offerings
is merely a continuation of the situa-
ton which, has existed for many months
in the stock field. With regard to bonds,
the February total represents a very
drastic reduction from the amount Of
fered in January, and resulted in sub
stantial falling of in business among
bond dealers. From the long-range
standpoint. however, the scarcity of new
issues at this time is probably a favor
able factor-making 1t possible for the
market to digest the rather large total
of January offerings and contributing
towar da scarcity value for outstand-
ing securities.
"Tax-exempt bonds were the only
classification to show an increase over
January-the municipal market having
ben fairly active throughout the month.
Among corporate issues, the only CLASH
flcation in which offerings of any size
were brought out in February was found
In public utilities, where s53, 875. 900 was
offered. Foreign bonds were next, with
offerings Of about s24, 5000
I'm the stock field, public utilities also
supplied the major part Of the months
volume, representing more than 80 per
cent Of the total.
Distribution Of Financing.
New York City bankers underworld
the major share of the months new Of
ferings, with more than 20 per cent Of
the total to their credit. Chicago
which usually stands In second place
dropped to fourth, with Montreal and
Cleveland in second and third positions,
respectively"
Summary Of Situation.
A summary of the facts and opinions
brought out in replies 10 the Lawrence
Stern & Co. QUESTIONABLE from leading
financial institutions in each of the IL
Federal Reserve districts for February
folI0WS:
More than 80 per cent of the bond
dealers reported poor bond business in
February. This Is in contrast to the
January reports, when so per cent Of
the dealers indicated that their bond
business was normal or better than
normal.
Retail distribution Of stocks shows
some improvement but remains def
nitely below normal, with exceptions in
the case of fixed trust shares.
A large majority Of dealers report
that investors prefer bonds rather than
stocks.
New issues in January were small in
volume and only fairly well received for
the most part
Among different types Of bonds, buy
ers continue to favor high-grade issues,
with little market demand for second
grade or high-rate merchandise.
Municipals are the most popular bond
according to the reports,
with public utilities second.
The majority OF dealers believe there
IS fairly good outlook for the future
Of both the bond and stock markets at
this time.
Demand for bonds on the part of
banks appears to have fallen OF In Feb
ruary, the majority reporting such de-
mand as being very small.
Considering the prevailing low inter-
Est rates. the number Of reports of tight
money is rather surprising. These re-
ports come mostly from the Southern
districts which have been affected by
irouth and other local conditions.
The outlook for general business re-
Vival is only fair, according to the ma
iority Of reports.