BUSINESS ABROAD: Optimism Unlimited

Wall Street’s optimism was matched on the world’s stock exchanges:

¶The Tokyo exchange set two records in a week. The number of shares changing hands rose by 30% during the week and the closing average price of 225 stocks hit $1.71, highest since the market reopened in 1949. Reasons: Premier Kishi’s recent election victory, a cut in the central bank rate to 7.67%, and Japan’s third consecutive bumper rice crop. ¶ On London’s Threadneeue Street, where stocks have bounced back 30% since the low point last February, industrial prices rose to a new 1958 high every day in the week. The London Financial Times’s index stood at 205.4, only 7.9 points below the alltime high of July 1955. Transactions in a single day totaled 16,599,000 shares, highest in 17 months. The trigger was Britain’s resoundingly successful effort since 1957 to protect the pound by raising interest rates, which has increased gold and dollar reserves by about $1 billion. Though British industrial production is falling and unemployment is rising, the big institutions have confidently moved back into the market.

¶ In West Germany’s eight independent stock exchanges, led by Düsseldorf, the bullishness neared 1955 levels. A year ago the index of share prices on the exchanges was 192. It hit 227 in June, has since soared to 277, rose five points in the first week of October. Chief reason: a shortage of stock because many companies have been using profits to expand rather than raise capital by new stock issues. The rise has brought in more foreign buyers, stirred Germany’s first crop of small investors through new mutual funds whose business is booming.