HONG KONG DAILY PRESS, TRADE REVIEW, WEDNESDAY, DECEMBER 31, 1930.
HONG KONG TRADE IN 1930
Full Review of Local Activities.
HONG KONG'S TRADE IN 1930.
براء
The year which comes to a close to-day has proved to be the stormiest twelve months Hong Kong has gone through since the general strike in 1925, when the Colony's trade was entirely paralysed. The primary cause of this unfortunate state of affairs is the collapse of the Hong Kong dollar, which dropped in' value from month to month throughout the year. The position at the end of the year shows continued uncertainty about the future of the dollar.
some believing that it will go down still further in the New Year. Doubts about exchange fluctuations have had a bearish influence on" trade in so far as it has made it impossible to book forward business without 'running' the risk of being a victim of the vagaries of exchange. The ever-cautious Chinese buyer has become even mora careful in his ecmanitments and business is thus confined to supply ing his immediato wants and nothing more. Few merchants, if any, have done even as well as in 1920, bad though that year was for the local commercial community. There are a fow instances of local arms doing well this year, but this has been, generally speaking, more by luck than by skill and judgment. There has been more than the average amount of anxiety for busintasmon in 1830, and the fact that no serious failures have been reported is a mattor. for congratulation all round. It is the strongest evidence of the businesslike steadiness of the Colony in general..
Hong Kong is, first and last, a clearing house for South China. A deflated silver dollar would naturally hamper the buying power of the country which Hong Kong sorvea. The import business. for the year has been the worst on record for a long time, but, taken in conjunction with the fact that exchange has not only touched, but has receded below, the lowest record, this drop in imported goods is not surprising. Trde, in some lincs, stacks are very low hut the dealer cannot be blamed if he refuses to take in more when the exchange stands at the lowest on record in the history of the Colony. No large contracts to replaco deficiency can be expected: until the outlook is brighter. The 'unfortunato feature of the depres- sion of trade in Hong Kong is that it comes at a time when there. is a world wide depression. We are not the only community suffer- ing from the stress of business inactivity, From all directions come tidings of similar dulinees in marketä: But 6 in Hong Kong have a doublé problem to face that of improving the trade of the Colony and that of combating the steady fall in the value of silver. An improvement in the silver situation would' undoubtedly mean an improvement in trade, but even were the dollar to rise appreciably in the new year, it would not,, by itself, be the panacen for all Hong Kong's ills. We are a very small community in the world of commerce and enn contribute but little to the restoration of the world's trade to normal. Our trade is guided and regulated by the world's economic situation as much as by the fluctuation in silver.
From a perusal of trade reports which are published elsewhere in this issue, it will be seen that the cry to-day is for restricted production. We are gettiifg, according to inerchants who are experts in their lines, too much sugar, too much rubber, too much coal,: too much rice, too much tin, and too much chipping. Something. must he done to increase consumption or restrict output. This is. beyond the power of Hong Kong We can but wait for this situa tion to straighten out. While the drop in the dollar is a definite obstacle for the importer it is by no means a corresponding help for exporters. Freight rates, based on a gold currency, have to be met in Hong Kong dollars. Moreover buyers from overseas, realis- ing the situation, are not offering what they used to offer in either sterling or gold dollars for the, producé exported from Hong Kong and Chind.
The decreased buying power of the people in Hong Kong and South China has led to the public considering price before juality, is much so that tiferior goods are gradually ousting higher priced articles from the local markets. A casa in point is in the piecegoods businesa where cheaper woollens find a ready market in Hong Kong to the detriment of well tried material of better quality. The low. exchange has also fidd the Roet of helping both local and Chinese made goods which can sell at a much cheaper price than the imported material, although in the matter of quality there is a big gap between the two. Competition has become increasingly keen in all directions and the smallest business is eagerly catered for, so that At least there is good service at small cost. During the year the Canadian Trade Delegation visited the Colony and no doubt took away, with them some very sound reasons why business with Chiria. is not as good di it might be. The British Economia Mizafon is due hory next month and there can be but little doubt the mission and, if it studies the question assiduously, provide a solution to the question of how to increase. British trade with Chins,
The outlook for 1881 is certainly not bright, but if the community. pull together and work together, there is no reason why it should be any worse than the year that is just coming to a clos-a year în which everyone has undergone a period of anxiety and stress,
NATIVE BANKS.
CONDITIONS FAR FROM
· SATISFACTORY.
That the business of the native
banks for the year has beeu far from satisfactory was the general tone of the reports gathered by the Daily Press from several Chinese. bankers. It appears that even this branch of the Colony's business Bas hed hit by the all round business depression.
Although there has been no out- standing failures during the year, the volume of business transacted bas bocn, as is to be expected, on the small, side.
The drop in the value of the dollar gave an indutive not only to native bankers, but also to money j changers to speculate on the ex-
REVIEW OF THE SHARE MARKET.
BEST YEAR SINCE 1925: ALL ROUND ACTIVITY
IN LOCAL STOCKS.
EFFECT OF THE DEPRECIATED DOLLAR.
The outstanding feature in the Hong Kong share market during the year 1030 was the unprecedented iso in the value of sterling shares which was brought about by the drop in exchange. In fact, the general dealinò in the value of the dollar was responsible in the main for the large volume of business transacted during the year, which
was the beat since 1923.
|
BAD YEAR FOR ORES AND METAL
CHINESE TIN.
EXPORT FIGURES DROP.
LOWEST PRICE TOUCHED THIS YEAR.
That the export of Chinese tin from Hong Kong has dropped from 7,700 tons in 1880 to 6,400 tons in 1930 and that the lowest price for the last six years was touched this year, was the statement inade by a dealer in tin when reviewing the business in Chinese tin for the yeat. The total quantity of tin exported from Hong Kong during the your 1030 was about 6,400 tons made up as follows:
t
Tons, To United States
9,000 Shanghai, *Foochow Amoy and Swatow 2,300 Japan..
1,900
Total
,0,400
#
In 1929 7,700 tons was exported.
In September, the Bearish element still had control of the situation, but with the market Blooded with money-which meant that unlimited capital was avail- able at very low interest-they were hot able to cause a very serious depression in rates. The Soptember Settlement brought so sign of im-The following is a comparative provement, but notwithstanding this statement of the highest and lowest and the fact that the settlement was points in the prics leval (for No. 1 a heavy one, no hitch of any kind China tin of per cent. purity). was reported.
for the years, 1923 to 1930:
Per Picul. Highest Lowest
Point.
Point. H.K.$19
The year opened with the Hong Kong dollar standing at about 1/7d. but this rate; gradually dwindled In October there was a notice. down to 1/1d. add. The effect of able absence of cash business in this was that the Hong Kong share the market, the. brokers devoting market was flooded with money that more time to forward Bookings would have been employed in than to anything else. A general legitimató trade had exchange re- mained in the vicinity of two shill-tumbling down in rates was anti- ings,
cipated, but fortunately this did From the point of view of inves were responsible for the "Buils" not come about. Instead, "shorts" tors.did speculators, tho year can scoring their first real triumph over Bo described as a prosperous one. the "Boars." Many stocks which have been ab- solutely unnoticed since the débâcle in 1925 have come it again for some activity while others which attracted some attention oven dur ing the worst period of the slump have reached very big figures, Generally speaking, rates improved stocks and those who have had hold during the year in all Hong Kong ings for the past few years must have tory big profits to show. The improvement, point of fact, bás
improve north that some people who wero "landed" with shares in 1025 edmo out to sell during 1030 with only vary small losses to meet on the
whole transaction.
December Bottlement.
the year, the business was mainly Between October and the end of concentrated settlement, which though very big, on the December caine, through satisfactorily. Some stocks showed improvement as the have retained at about the same yehr canib to a close, while others level as during October.
Industrial and Commercial Bank was reported to be one of the reasons why the market slumped alightly during the summer months,
The suspension of business of the
117
1930
$120
1020
129)
1028
140
118
1897
178
143
1920
1861
1998
141
130 121
REPORT BY ANOTHER
DEALER.
LITTLE LIKELIHOOD OF
IMPROVEMENT.
MANGANESE.
CHINESE PRODUCT FACES
KEEN COMPETITION.
MAIN BUSINESS WITH JAPAN.
Keen competition in the Japanese market was the keynoto of business in manganese ore in 1930.
The Chinese manganeso ore comes principally from three producing centres, these being in Hunan pro- viner, in Kwangsi and in the south ern of Kwangtung.
The production in Hunan bas owing to Communistic activities in been suspended during the year the mining districte. It is hardly possible to ship this ore from Hunan in any appreciable quantity,
WOLFRAM ORE.
GENERAL TRADE SLUMP AFFECTS BUSINESS,
GERMAN BUYERS LOWER THEIR PRICES,
The business in wolfcam oro dur ing the year has been, on the whole quite good, considering the man drawbacks with which dealers ha to contend. Altogether, about 5,00 tons of this
this ofe was shipped
Europe and Ameries
wolfram ore, over 8,000 tons out o China is the leading producer
being mined there. This orei a total world production of 19,000 essential for the manufacture o tool steel and high speed steel, and Germany is China's biggest cus tomer for wolfram oran
The chief producing centres South China are in Kwange and Hunan provinces, but going to Com munists disturbances in these arets the majority of the ore produced in Kwangsi and Hunna mines is sent sent to Canton from whence it i transhipped to Hong Kong.
The ore produced in Kwangai is the best in quality, but owing to political disturbances in that pro vince at the beginning of the year, no ore could be shipped from the Pines to Hong Kong. After the dis turbing elements had been routed out of Kwangsi, the traffe, between the mito districts to Hong Kong was teemed and no less than 20,000 Hong Kong to Japan.・・ tons of the ore were shipped from On the whole, while business has been good, the rear has not been The products of Southern Kwang-prosperous because the market price tung are generally inferior in for tho ore has become weaker and quality. About 10,000 tons of this wenker throughout the year. In the the year. cargo was shipped to Japan during earlier part of 1936 the price pór picul of wolfram ore in the Hong Kong market was about 800, de livery on seller's godown. This ha been gradually reduced until at the eginning of December this price has been down to $5 por picul
The downward trend of price i attributed to the depression of trade throughout the world.
Japan appears to be the only market for this ore and thero was keou competition in Japan between Chinese manganesore and Indian manganese ore. The latter is slight ly better in quality being a to 50 pèr éött! ärb. It is also slightly cheaper if price, and it had little difficulty in establishing a favourable | * Tha drop in the price of silver is position with Japanese buyers. another reason for the drop in price As a result of this competition, of wolfram ore. In anticipation of the prices of the Chinese product fall in the price of wolfram due began to slide. At the beginning to the collapse of the dollar, the of the year the price in Hong Kong German pool, representing an or was $30 per ton for 46 per cent. oru ganised association of buyers, re but this was gradually reduced to duced their ideas of price consider 820 later in the year. Towards ably. December, however, there was an In order to check the unrestricted because Indian manganese 'ore had chants had in mind the establish. entire absence of demand in Japan, drop in prices, the Chinese mer practically ousted the Chinese proment of an export syndicate -and duct from the market.
after lengthy discussions and nogo
The absence of demand is, to a
measure, due to the abnormally in Japan. Stoel manufacturing com- weak condition of the steel market York punies have had to restrict their
Another Arm. which was ap proached by the maily Preez for a report on the China tin business during the year, states is follows: slacked somewhat due to influences The price of Chinese tin has It was stated at the time that from London and.. New The gradual improvement of the holdings in local companies were any encouraging feature in the year, which naturally affects the several million dollars worth of markets and it was difficult to find output by over fifty por cont this market led, as one might expect, thrown on the market for sale. Be general outlook! London market manganese business. to short selling on the part of the that as it may, there is no denying prices during this year were re- more venturesome element in the the fact thad the quotations during duced by 30 to 35 per cent. comparmanganeso ore is not too bright, as, market. In the more speculative the latter part of the year of most od with those of 1929.
The outlook for next year for counters, especially in publio utility of our public companies was on the companies, there was a noticeable high side.
at the time of writing, there is still decline in rates during the summer
no sign of improvement. months of June, July and August.
la addition to the suspension of Short selling proved, during these the Industrial Bank there was at months, to be a profitable game, the same time a strong "run" on but this form of apoculation receiv- two other banks in the Colony, both ed a jolt on October settlement day of which were mere scares. But when one of the best known gambl the effect of these runs was that ing counters in the market shot they proved to be additional chan up two points in the course of one nels through which money flowed day. The subsequent covering by into the share market. theshorts" kept rates all round, at a fairly high level for a fort night or so, after which another de- cline was notice which led to further speculation.
No Hitch.
Owing to the favourable exchange drop in the price of silver, the local trend for export business due to market prices were maintained at drops in both London and New a fairly high level in spite of heavy York.
increasing whilst the output con Consumption shows no signs of tinue to be restricted. Under these circumstances, it may be difficult to maintain the present prices. It iz generally felt that some form of restriction should be put on the production of Chinese tin, otherwise the production will far outstrip con sumption.4
Chinese, tin does not great affect
BISMUTH ORE.
SMALL BUSINESS DURING
THE YEAR.
tiations, a plan is reported to have been adopted by the Canton Govern monopoly system for the export of mont. It was decided to enforce a this ore. The details of this new plan are expected to be made public in a few days.
tained during the year. Transpor The purchase of Kwangsi wolfram ore by Shanghai has been well mein- tation of this are, however, has been mainly vid Canton and/or Hong Kong sa bo the overland route le more or less infested by bandits, in addition to which it is longer and Icés convenient.
ANTIMONY ORE.
QUIET CONDITIONS PREVAIL.
Local Undertakings. Shipping and Dock shares showed but little improvement during the year. This is quite understandable for while local undertalkngs have every prospect of development, There has been in hitch, fortu: coastal shipping is practically dead the world, tin market. It is sent nately, during the gent. Beginning China Lights, and Comments are still from South China to United States; cautiously in the month of January, the favourits counters for specula- when the crash in the Shanghai tots and the fluctuation of the Japan and Shanghai. The United aline market (due to over-apecula quotations in these two stocks are during the year, Shanghai bought States bought about: 3,000 tons
minda of the Krokers, the local for amalgamation of the China about 2,000 whilst Japan bought 32 per cent purity as compared has been converted into antimony tion in Ewos) was still fresh in the köenly followed: The negotiations market gradually strengthened and Light and the Hong Kong Electric the pessimistic elements among the Company were definitely known to brokers predicted a drop in rates, be off during the beginning of the which however, did not come about year, but in spite of this both com stocks and in the more speculative During this part of the period banies have shown improvement varicly, for all and there was no under review, the amount of their quotations. Another negotia-
about 1,500.
speculation was not entirely unretion which was followed with keen need to turn to Shanghai for in- stricted as it became during the interest in the share market was veatment: Towards the end of the latter part of the year. This was the proposed purchase of the Hong year, business was slightly better because credit was not so easy to Kong Hotel's 'bus service by the with Shanghai but by no means obtain.
Tramway Company. The suggested big. With the decline in the value of purchase did not come off but it
The Outlook Good. the dollar, a bigger, intereat was proved to be the medium of a fairly taken in the local market in gludote business both purely from the point of view of The outlook for the new year is- THE VALUE OF THE February and March. This market Trams and Hotels at the time.
attracted more and more investors Yet another interesting develop. Money is still easy, which indicates the altare market-quite good. DOLLAR.
and speculators and there was a ment during the year was the further activities. There are many visible rise in rates during the attempt to alter the scale of who consider present quotations too Chimes New Year period and again brokerage. One section of the
MONTHLY T.T. RATES.
ing the year may be judged by the The fluctuations of exchange dur following figures:→→→
January 2 February 3 March April 1
May 1
June 2
Joly 1 August 2 September 9 Octobar 1.... November 1 December 1 December 30
the year 1930 has been small, but The business in Bismuth ore for it has never figured very promin ently in export trade as the produc During the year 1930 about 1,000 tion is limited to small quantities. about 100 tons, and the whole of the vicinity of the 6 per picul at tons of this ore has been shipped to The production this year was Europe, the average price being in this was shipped to various markets the Hong Kong end in Europe. Swatow, the former being of about South China In the past the or
The oro is mined in Kwangsi and the greatest sources of antimony in Kwangst and Hunan are two of
with the 40 per cont. of the latter.
The price of $1,800 per ton for longer profitable owing to the dến regulus but this Bluiness is no
of the downward tendericy of ex Towards the end of the year con 60 per cent. ore was maintained pression of prices in Europe and throughout the year, but on account America change, the price may rise some-ditions were very quiet and the out what in the new year.
look for 1931 is not at all bright
RATTAN AND CANES. In the matter of rattan core, the
HEAVY EXPORTS FROM HONG KONG.
·GOOD' BUSINESS IN. FURNITURE.
principal buyer has been New York to which port no less than 17,0001 bales representing a business of $300,000 have been exported An interesting point about the cores exported from Hong Kong is that they come from the West Indies They are prepared by native work- ere in Canton and are exported from Hong Kong. Last year only 8,000 bales of rattan core were, ex-1 ported from Hong Kong to New!
and cance has been well maintained The care business also has been
Business in ruitan, rattan core | York during the year, according to one of very suoouraging during the year the biggest exporting houses in the the export figures being as follows: Colony, pandud
Mabaharia Balës." To Europe 13,00
United Kingdom., 23,000
Kong, are known as Tonkin and
New York 0,900 The canes exported frota Hong
in Kwangsi province,
just before the Annual Race Meet brokers zod a half per cent, curge ligh bad predict, a drop in rates ing in Hong Kong, where, in former on all stocks and the effort crested very soon. On the other hand,
fathem the possibilities of the local change, and the Shorebrekers As-alone should result, in quite a years, a decline find been customary, quite a good dent of interest at there those who have plenty of Investors from abroad began to the time, but both the Stock Ex-confidence in the future of some of our public companies and this fact share market and with exchang so rociation did not feel called upon volume of forward business through much in their favour, a good heal to alter the standing rates. The out this yest. While credit facilities of money was placed in the Hong attempt to reduced brokerage has are not difficult to obtain forward Kong market by investors from automatically fizzled out business will be continue to attract abroad.
Business With Shanghai The Hong Kong dollar, incidental All this time there had been a the year has been on the small record, there are many in Houg Business with Shanghai duringly, stands at a very interesting figure. While it is the lowest on 1/3 13/16 steady volume of forward business, side. It must be remembered that Kong, who, figure that it will 8 Pacifle Coast ports of the United Tsingles canes and is grown mainly
and after March there was a visible the year commenced witli the down still more while others feel tendency to do more forward bust. Shanghai market in a turmoil, since that further drops are not posible that some 18,000 bales of the total Europe aro in Holland and France ness. Operators in the market when the price of Ewo Cation began to concentrate on the June shares had been, sliding down. In it seems as if the vaguaries of ex- of 20,000 were landed either at Ban
Exports differ on this point and Settlement, Between March and addition to this, news of political August-Kettlementerabos-Anctasted upheavals thurine the pathwest change will prove another reason.
1/01
1/5
1/0 1/6-1/10 1/4-1/8 1/3-1/8 7/3
1/37/18 1/37/16: 1/21
1/1}.
Forward Business.
Rattan furniture continues to enjoy popularity as evidenced by the fact
Hong Kong during the year. The that no fewer than 20,000 bales of rattan furniture were exported from bulk of these shipmanta were to the States of America. It is estimated
The principal buyers of canes ins Francisco LA. Angeles or Seattle has
A great quantity of the canes puré ZITE BUKURERE ALIone represents a the Continent.
ly have done well, because the have also somewhat handicapped "Bulls " and "Bears concerned to Hong Kong investors, with the altogether, from the point of IO 8700,000 and is about $100,000 more directly affecting thig Business is an According to the strength of the 1 Mie, scar did not give confidence for nuectuation in the Edary marke turnover of about Hong Kong The drop in exchango, while ot
majority have figured on a further the business of the Chinees banks, drop in exchange during the year. The fact that money is easy in The reductions in the rate of in-Hong Kong at the moment does not terest granted by the foreign banks help the situation from the point (Continued at foot of next column.) of view of the native banker.
but as stated elsewhere there was decline in rates during the summer months which indicated, a victory for the time being at least, for the
Bears.
result that business with Shanghai business in Hong Kong, It looks than the turnover registered in 1020. of the man engaged in local share was neglected for actinis. More over, there was sufficient activity in very much as it 1931 will prove to the furniture exported from Hong Kong both in investment po a more prosperous period than Hong Kong has been supplied to
the year which has just come to a exporting houses by native makars. (Continued as foot of next column.
(Continued at foot of next column.) | close.
obstaude in that it has resulted in higher freights Taken al however, the year 1937 has not be rattan business. such a bad year for the cane and