8
BUSINESS REVIEW of 1906.
EXCHANGE.
The glorious uncertainty of the course of exchange basagain been exemplified during 1906. The year opened with the T.T. rate at 2/9/16. For many years past the tendency has been for exchange to rise towards Chinese New Year but the great native settling day seems to be losing its former influence. In this instance the rate cose only until the 15th January, when
it touched 2/-13, 6, after which it fell away to 2/-1/4 remaining steady up to, and a week or more beyond, Chinese New Year. A gradual upward movement then set in until the 27th February when 2/1 1/16 was reached. That was the opening rate for March but a rapid decline set in and exchange fell almost daily until the 12th of the month when the lowest rate of the year was recorded viz: 2/-1/8. From this point there followed a steady upward movement until at the end of April 2/1 was quoted and in May 2/1 1/2. On the 1st and 2nd June the highest rate for the first half of the year was reached viz: 2/1 9/16.
In July steadiness prevailed; the rise and fall only ranging from 2/1 5/16 to 2/1 1/2; indeed steadiness continued until the middle of August when a further rise commenced to assert itself and 2/1 15/16 was touched on the 31st. Early in September the rate climbed well over 2/2-the highest point being 2/2 9, 16, In October 2/3 was passed and topped by 23 3/8. This rate obtained during the early part of Aovember, then gradually advanced to the highest quotation of the year 2/3 11/16 on the 19th November, when the price of silver was 33 1/8-the highest known since 1893.
From this-the pinnacle of the year-exchange fell until the 28th when we saw 2/3 1/16 again and silver at 32d-a fall in the price of that unstable metal of 1 1,8 in 9 days. Since then. ratsa have varied But little, say from 2/2 13/16 to 2/3 1/8, the closing quotation for the year.
Everybody who knows anything about ex- change knows that the problems connected with it are insoluble. The most that even the youngest can pretend to know is based on unreliable information of the vaguest kind. But certain large governing factors stand boldly out at times and at this time, there is no mystery about the immediate cause of the phenomenal rise in the price of silver. It is unnecessary to remind our readers that it has been, and still is mainly due to abundant crops and extraordinary prosperity in India. Statistics, as we all know, can ordinarily be made to prove anything, but there are some figures that cannot be explained away and figures so remarkable as those showing the export of silver to India from London in 1906 compared with those of the last 10 years mean an abnormal capacity of absorption consequent on phenomenal prosperity. The average annual export of silver from London to India for the past decade has been estimated at roughly 6 1/2 millions sterling. This year, up to the time of the last mail leaving London, the amount exported totalled over £14 millions. The corresponding figures for last year were under £6 millions.
This £8 millions extra has been largely pur. chased on Government account. The Indian Finance Minister, foreseeing that the financing of the abundant crops would lead to an enormons demand for Rupees, decided to increase the reserve by millions. Thus during the year exchange in China has depended upon India, and the future course of it will be ruled by her needs. What these will be in 1907 belongs to the unprofitable business of prophecy with which at the moment we have luckily nothing to do.
It is however fairly safe to say that there is little likelihood of exchange tumbling early in 1907, if at all.
YARN.
The year just ended may be pronounced to have been the most disastrous the trade has experienced since its commencement. With the exception of the Bombay spinners, who bare been driving a roaring trade during the last eighteen months, business has been more or less detrimental to our unfortunate importers and dealers. When it is recorded that the losses are roughly estimated at close upon three millions, and that of some fifteen yarn-dealing
THE HONGKONG WEEKLY PRESS AND
hohgs eleven have collapsed, it requires no farther proof to show the serious nature of the disaster of which we have not heard the last. The year opened with an unsold stock of 84,000 bales and ends with 166,000, the entire quantity | of yarn held by the insolvent dealers falling back upon sellers with a small exception.
TONNAGE.
The beginning of the year saw the freight market rather dull, with many steamers laid up at the various porte, but an improvement came with February, though freights still remained low till May. By the end of Jane practically all steamers were in full employment, and after a dull interval there was a great demand in the middle of October, greater than the supply of tonnage. In consequence rates improved and Saigos. Newchang,also took a number of hosts many steamers were fixed from Bangkok and and many steamers were fixed from Japan to Hongkong with coal. The year finished very dull and there is no likelihood of say improve- ment until after Chinese New Year. The new Indo-China crop is very good, but the Northern business being dull there is a possibility of too much tonnage being again thrown on the market. Daring the year over forty Norwegian steamers have left the coast and a large number of British tramps have also gone home. This may help matters somewhat,
SUNDRIES.
During the first part of the year there was very fair business booked, but when the goods come along later, exchange had risen to a con- siderable extent and dealers used any excuse to get out of their contracts. Importers in many instances were left with heary losses to face. Towards the close of the year an improvementhad taken place. One feature of the year has been he increased demand for European goods, a fact which would seem to indicate that the people in Canton and neighbourhood were largely adopt well as manifesting a desire for Europeau goods ing Western customs and Western clothes, as
PIECE GOODS.
The trade in piece goods has not been up to the average, only a third of the business in grey and white done last year having been effected. Foreign cloths are being used more and more every year by the Chinese, serges, mellous, tweeds, etc., being now in great demand and, while the old style of woollen goods (Spanish stripes, etc.,) have been going out of use, they are now coming into vogue among the Chinese.
SILK.
The past your was about au average iu respect of the trade in silk. The demand was very good and dealers got the prices required. Prospec's were never brighter than at present.
MATTING.
The high exchange ruling during the year has interfered with business to a considerable extent and the outlook is not particularly bright.
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CASSIA.
In this export business was hampered by the hig dollar. The volume of business was in consequence much smaller than usual. The Chinese would not reduce prices in proportion to the higher rates of exchange.
METALS.
Tin was also afected by exchange. prices in Singapore being cheaper than here and in consequence business came to a standstill.
HONGKONG SHARK MARKET.
Reviewing the business of the year now closed, we can only say that the results have boen of a very disappointing nature, various causes combining together to restrain business and to lower rates. The steadily rising sterling exchange caused people to realise their holdings and to exchange them into gold, thus causing a severe strain, and as most of the money has been remitted home at much lower rates thu now ruling we cannot expect an influx of money again until the rate of exchange drops suffi- ciently. Of this, however, there are no sigos; in fact it looks as if the exchange will rule bigh for some time tocome. The poor silk and rice crops in the south of China during the year have deprived the Chinese of purchasing power, and besides this, heary losses bars been made by importers and dealers in yarn transactions. The Septem- ber typhoon also contributed towards the already depressed state of things. No wonder therefore that shares have been neglected, and outside a few speculative stooks, such as Traders and Shanghai Docks, in which large dealings have
I
[January 7, 1907.
taken place lately with the northern ports, our market closed rather quiet.
Hongkong and Shanghai Bank shares, which opened at $895 at the beginning of last year, dropped gradually to $790, but have advanced again to $825. National Banks have improved from $38 to $47, closing steady. Union In- surance Company shares opened at $730, rose to $810, but closed at $760.
China Traders, which in a way are now merged with the Union, although continuing as a separate Company, have varied between 891 and
$100, closing at 895.
North Chinas, which are seldom dealt in locally, have ruled between Tls. 95 and T'ls. 82†, which latter was the closing rate.
Yangisse Insurance shares, after advancing from $.70 to $190, closed with sellers at $16 !.
Canton Insurance shares rose from $315 to
$360, but have dropped gradually t› $2974.
Owing to smaller trade the business of the insurance companies has suffered to some extent. Hongkong Fire Insurance shares have not nudergone many changes, ruling between 8310 and $335, which latter was the closing rate. Barring large losses between this and the time of the next dividend meeting, this company ought to place a good report before the share- holders. The same may be said about the China Fire Insurance Company, whose sbares ruled between 883 and 893, closing with buyers.
Hongkong, Canton and Macao Steamboat Company shares kept pretty steady during the fist nine months of the year, ruling between 8251 and 828, when the disaster to the Company's fleet during the September typhoon dropped the rate at once to $24. These troubles being over and the Company again at work with full power, the rate has advanced to $28.
Indo-China Steam Navigation Company's shares ruled between $90 and 897 during the first five months of the year, when a slump set in, the rate dropping to $75 and to $70 when quiet between $70 and 873 up to the middle of the dividend was paid in July. Shares remained November, when the northern port began buying to cover shorts, which seat the rate pp to $100, but the demand having been met the rate has goue back to $90. Business has not been profitable for the Company, as freights all the time have ruled low.
China and Manilas ruled between $18 and $24 according to rumours about a proposed sale of the Company or the denial of the report, and closed at $21 sellers.
Douglases rose from 837 to $47, but could not maintain the rise, going back again to $37. This Company suffers from the Japanese com petition on the coast.
14
The Star Ferries have been dealt in but little, ruling between $32 and 8254 for old and 823 and $174 for new shares, the closing rate being 826 and $17) respectively.
Shell Transports have attracted attention at several periods during the year, rates ruling between 22/6 and 31/6, closing weak at 30/.
China Sugars, which at the beginning of the year stood at $205, rose to $216, but have since, with a few fluctuations, gradually fallen, the closing rate being $125. Japanese competition in the north has interfered with the Company's working and now that prices of raw sugar have gone down considerably the outlook is not very brilliant at present.
Luzon
Sugars have been a-deglected
less
in quantity
although the course of the year an unconfirmed rumour that the Americans were going to buy the Company caused a rise to $40. The market closed with sellers at $21.
more
or
Charbonnages have not been desit in and the quotation is 8450 nominal.
Raubs have fluctuated according to reports from the mine. The rate ruled between $24 and $10, closing at $81. Last reports from the mine are more encouraging again, and the output for 1906 will show an improvement of about 25 per cent as compared with 1905.
Hongkong and Whampoa Dook shares ranged between $133 and $165. Shortly before the typhoon the rate fell to 8133 but the market improved to 8160 only to fall again to $145. The Company bought the adjoining ground to the Admiralty Docks which is to be lengthened to adfait of the largest steamers aflost to be docked. The Company has plenty of work and ought to show a handsome profit for the second half of 1906.