SECURITIES FIRMS AND CREDIT UNIONS TO START HOME GOLD SALES IN JAPAN

SECURITIES FIRMS AND CREDIT UNIONS TO START HOME GOLD SALES IN JAPAN

Japanese securities houses and credit unions are due to launch door-to-door sales of gold in January.

Their doorstep offerings might help restore the shine to Japan's lackluster gold demand, industry sources said.But bullion houses, which already sell gold and will not take part in the house-to-house sales, caution that the scheme could give swindlers an entree on the unsuspecting.

"This can be a positive step toward growth in gold demand," Koichiro Kamei of the World Gold Council said.

Zenshinren Bank, an association grouping local credit unions, has given the go-ahead sign for credit associations to begin such sales in January. It is still unclear when the Ministry of Finance will allow securities houses to start.

For most people, gold is still seen as an exotic investment, but it has staunch advocates in the current environment of low interest rates and halting stock market advances.

A popular way to buy gold is through "accumulation accounts," where investors pay a fixed amount of money each month to buy bullion. The amount of gold bought increases when gold prices fall and decreases when prices rise.

The number of such accounts in Japan stood at 340,000 in December 1992, compared with 300,000 a year earlier.

Payments for gold accumulation accounts are usually transferred automatically from clients' bank accounts and gold demand for the accumulation

plans accounted for more than 30 percent of Japanese imports for investment in 1992, according to WGC.

One attraction for Japanese investors is that yen-based gold prices have fallen to their lowest levels in 17 years, due to the appreciation of the yen.

Hard hit by falling stock market prices, securities firms regard the new license for door-to-door gold sales as a chance to boost business.

Securities houses have been allowed to sell gold bullion since 1982, but have seen little business since sales were restricted to retail branches.

"Stockbrokers are currently concentrating on marketing accumulated stock investment schemes, but when they switch to gold accounts, demand for gold is sure to go up," Mr. Kamei said.

He sees growth of 10 to 20 metric tons a year in gold demand in the first few years that security houses start to market the accounts at full steam.

Japanese gold demand so far this year has fallen in the industrial, investment and jewelry sectors because of the recession.

In the first nine months of 1993, Japan imported 139.70 tons of gold, down from 141.86 tons in the same period a year earlier.