Italy
Tipologia : Paragrafi/Articoli
Data pubblicazione : 02/04/1938

Italy

«The Economist», 2 aprile 1938, p. 12

 

 

 

RECORD CAPITAL ISSUES. – Turin, March 14. – This will be a record month in the history of capital issues by Italian joint-stock companies. Shareholders’ meetings of both small and large companies have, one after another, approved of capital increases ranging from 10 per cent, upwards of existing capital. In recent years, capitalisation has been modest:

 

 

 

 

 

   

 

1935

 

1936

 

1937

New Companies: Number

2,499

1,976

2,195

Capital (million lire)

311

354

2,283

Old companies:

1) Increased capital

Number

1,540

1,820

1,940

Capital (million lire)

2,787

2,608

3,281

 

2) Liquidated

Number

2,003

1,851

1,530

Capital (million lire)

1,511

924

2,053

 

3) Diminished capital

Number

989

923

772

Capital (million lire)

1,810

1,327

621

 

Net increase (+)

or decrease (-)

 

Number

493

125

656

Capital (million lire)

-224

710

2,889

 

 

The total number of joint-stock companies now stands at 20,018, with a capitalisation of 47,695 million lire. The increases now projected will be mainly a matter of writing up. The force behind the movement is the recent tax of 10 per cent, on the capital of joint-stock companies. The tax decree authorised companies to issue new shares up to the amount required to pay the tax; and, to make the shareholders swallow the pill happily, authorised companies to issue, at the same time, up to two bonus shares for each paid-up new share. The issue of bonus shares can be justified by the writing-up of undervalued assets; for all assets, in a general way, can be deemed undervalued since the alignment of the lira in October, 1936.

 

 

The reaction to this enabling legislation will probably not be uniform among all the 20,018 companies. Most of them are one-man or family concerns, which will not be over-anxious to increase their capitalisation. The most important companies, whose shares are quoted on the Bourses, will, by watering their capital, achieve two objects: first, they will be able to distribute higher dividends, without increasing the percentage, and so without incurring the penalty of the new progressive taxation on dividends over 6 per cent; and, secondly, by writing up their assets, they will increase the yearly amortisation sums which, according to income tax regulations, they are allowed to deduct from gross income.

 

 

UPWARD TREND IN TRADE. – Signor Lenti has analysed in II Sole the recent trends in Italian foreign trade. Excluding trade with the colonies, the figures are as follows (in million lire):

 

 

 

Imports

Exports

Import Surplus

1934

7,582

4,965

2,617

1935

7,662

4,489

3,173

1936

5,883

3,830

2,053

1937

13,489

7,849

5,640

1937*

7,958

4,631

3,327

 

* Calculated in pre-alignment Lire.

 

 

Expressed in index number (1929=100), the volume and value of foreign trade have moved as follows:

 

 

Volume

Average Prices

Imports

Exports

Imports

Exports

1929

100

100

100

100

1934

75.54

73.10

46.56

45.51

1935

73.11

65.92

48.61

45.63

1936

45.98

49.31

58.89

51.14

1937

67.95

80.42

92.00

64.75

 

 

Thus, the volume of imports has fallen by 32.05 per cent, since 1929; while exports fell only 19.58 per cent. But, since import prices declined only 8 per cent., while export prices fell 35.25 per cent., the terms of trade moved against Italy, and the surplus of imports in value reached a record high level.

 

 

This deterioration in the terms of trade is most marked in the case of semi-finished and finished products. As food and raw materials are a large part of imports, and semi-finished and finished products bulk largely among exports, improvement can only be achieved by a relative increase in the export price of finished products. How far such an increase could go without jeopardising exports is the crucial problem of Italian foreign trade.

 

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