Chapter 899: The Paris Stock Market Crash
Chapter 881 Paris Stock Market Crash
Falling prices are not equal to the decline in production costs of enterprises, and even because of the factors of labor and industrial raw materials rising, the production costs of many enterprises have risen instead of falling.
Britain and Russia to provide military orders below market expectations, a number of industries are facing a situation where supply exceeds demand. Against this background, the processing and manufacturing industries are naturally having a hard time.
In order to survive, we have to fight a price war. Fast-reacting enterprises are okay, at least in the early days of the outbreak of war last year made a big profit.
The market fell back in the first quarter, overall profits are also good. Into the second quarter after the tragedy, a bunch of fantasies of war wealth guys joined in, further intensifying the market competition.
Quit is impossible, the funds have become machinery, equipment, plant, this time to leave the market simply can not find the receiver.
Relatively speaking the least affected is the British companies, government procurement priority domestic, invariably occupies the greatest advantage.
The worst among the big countries is undoubtedly the French industry and commerce, the British government orders can not be grabbed, the Russian orders and face competition from Austria.
The French government is willing to issue bonds to the Russians, in fact, is also to compete for the market, took the franc naturally want to purchase French goods.
Even so, also the French industry and commerce can only get part of the daily necessities orders, the most profitable military field simply can not compete with Austria.
It is not that the French companies do not try, but also the Russians are not treated differently, mainly because the military-industrial system is not the same.
Russian and Austrian weapons of the same caliber, bought can be used directly, logistics and maintenance are very convenient.
If you buy the French products, not only the soldiers need to be retrained, logistical supplies, maintenance is a big problem, the war years Tsarist government must consider the practicality.
……
On May 24, 1890, another day for public companies to announce their earnings, the Paris Stock Exchange was already crowded.
You can tell that everyone is in a good mood by the looks on their faces as they talk and laugh. The Anglo-Russian war had been expected for a long time, and now it was time to reap the rewards.
From the outbreak of the Anglo-Russian war to the present, the average stock price of the Paris stock market rose as high as 23.7%, the foreign trade enterprises plate rose once exceeded 57%, the share price doubled are few.
Based on the lucrative returns during the Russo-Prussian War, everyone’s expectations for the Russo-British War are very high. Especially the last quarter of last year’s earnings report, but also proved this point.
As for the fall in prices, I am sorry that the French public has not felt it. Because of tariff barriers, French prices are relatively little affected by the international market.
These days, news travels slowly, and capitalists are shrewd masters. With export earnings falling short of expectations and a serious backlog of products, it’s only natural that such news should be kept in the strictest of confidence.
If the news leaks out in advance, who will take over for them? Market regulation is about zero these days, and everyone has been slowly reducing their holdings since the first quarter when sales went south.
With the constant favorable news, ordinary investors have no idea that a crisis is approaching.
In front of the exchange, a slightly middle-aged fat man was reading a financial newspaper with great interest.
“Amicus, what are you reading?”
The middle-aged fat man Amicus replied with slight regret, “The financial newspaper, the Hex Textile Factory is negotiating with the Russians, and if nothing else it will be another big order of thirty million francs!
It’s a pity that I’m timid, I heard some days ago that Hex Textile Factory had a serious backlog of products, and withdrew half of it and turned to buy Fidolon Machinery Factory, missing this wave of market.”
The visitor consoled, “It doesn’t matter, Fidorun Machinery Factory is not bad either. The downstream market is so good that companies are expanding their production capacity, so how can the performance of upstream equipment manufacturers be poor?”
This was the most common experience, once the industry was good, the enterprises in the entire industry chain would benefit.
Amicus shook his head, it was not true that the upstream enterprises would benefit. However, the increase in share price was definitely not as large as the increase in the enterprises in question.
It was a time of war, all industries related to strategic materials were favorable, how could there be a large-scale product backlog?
Even if it is a backlog, that is also the enterprise hoarding ah! Thinking of this, Amicus directly greeted the whole family of the guy who delivered the news.
Looking at the visitor with a smile on his face, Amicus tentatively asked, “Anthony, I remember that you also bought this stock, I think this time it should harvest well.”
Anthony smiled slightly, “Just happened to catch up, didn’t buy much, just 20,000 shares.
But Amicus, your guts are too small. The most important thing to do in our line of work is the mindset, to analyze the overall market, there’s no need to pay attention to petty news at all.
Capitalists aren’t fools, if there was a serious backlog of products, they would have already known to lay off employees and cut production, unlike now when the streets are filled with recruitment ads!”
Upon hearing his friend’s analysis, Amicus’ face became even more ugly, as if he had lost another hundred million dollars.
Judging the operation of enterprises from the labor market, this is the most basic ability of ordinary investors, even if the stock market white should know.
Especially for the manufacturing industry, when companies are recruiting heavily, it is definitely the best time for the market.
Seemingly realizing that he had said too much, Anthony hastily remedied the situation by saying, “Okay, Amicus. Now wait for the enterprises to patiently announce their financial reports, they are all earning anyway, it’s just a matter of how much.
It is not likely that the performance of the machinery factory is explosive, the stock price rose above the textile factory. You know there have been a lot of new factories popping up in recent times, and they’re all in need of purchasing equipment.”
As soon as the words fell, he heard someone shout again, “That’s impossible!”
“It’s not true, it must be a lie right?”
……
As the financial reports of each company were unveiled, similar voices began to abound.
Realizing that something was wrong, Amicus and Anthony, who were still on the outskirts of the crowd, hurriedly pushed their way towards the exchange.
But it was too late, the stockholders who had gotten their hands on the earnings reports, after the initial panic, had already begun to sell their stocks.
The market was filled with sell orders, and there were no buy orders in sight. All the investors on the floor knew that the market was going to be finished.
Seeing the situation out of control, a group of prepared police appeared in the market and began to maintain order.
By the end of the day, the Paris stock market fell 8.6%, and some stocks were directly cut.
This is just the beginning, today announced the earnings of enterprises is only a small part, the rest of the enterprises will be announced in the following week.
If the majority of companies are less than the market expected, that would be a real disaster, now can only be considered an appetizer.
Only this appetizer, the Paris stock market half of the gains directly tossed half.
……
Pushing the book “The Han Flag Will Not Fall
(End of chapter)