INVESTMENT NOTES
By CUSTOS
WIDESPREAD investment buying has restored the upward trend of prices on the Stock Exchange. One of the powerful factors in the next few weeks will be the reinvestment of the money from the takeover of BRITISH ALUMINIUM. The largest institutional holder of BA shares was the Church of England, with 260,000 shares, equiva- lent to £1 million. The total reinvestment poten- tial is over £30 million. Another factor in support of the equity share markets is the growth of the Unit Trusts. This week the UNICORN TRUST is offering 2,000,000 shares at 13s. 3d. (to yield 4+ per cent.) and MUNICIPAL AND GENERAL are again advertising the offer of units in their ever- expanding trust. It is estimated that over the past three months the outstanding total of units in public hands has risen by £15 million to over £100 million. In these circumstances it is small wonder that the Fife County Council £5 million issue of 51 per cent. stock 1974-76 was heavily over- subscribed, the market opening at Ito 1 premium. I would again draw attention to Jamaica 6 per cent. at 102 and Rhodesia 6 per cent. 1976-79 at 102+.
Steel Shares
Whether Mr. Gaitskell's statement that Labour
will pay 'full and fair' compensation on re- nationalising steel will bring any fresh confidence into the .steel share market is very doubtful, but I would expect the market to rise as more and more investors come to value the chances of a Conservative victory more favourably. There are also three shares which seem to attract American buying—UNITED STEEL, JOHN SUMMERS and STEEL OF WALES. The last two have just issued excel- lent reports. Steel of Wales for the year to Septem- ber increased its net profits by over 20 per cent. The current year has started with full-time work- ing in all divisions and production capacity will increase with additional plant coming into opera- tion in the second and third quarters. The divi- dend has been raised from 8 per cent. to 9 per cent, and this is by no means the ceiling. The shares were as low as 15s. 6d. at one time last year and are now quoted at 22s. 101d, to yield nearly 8 per cent. John Summers profits increased by 121 per cent, and with the completion of the present expansion scheme by the end of 1959, the shareholders can look forward to receiving in 1960 the rewards for their patience. The dividend has already been increased from 14 per cent. to 16 ?er cent. and at 40s. the shares return 8 per cent.
Banks
Last week I pointed out the attractiveness of UK bank shares, all of which have now declared their final dividends and announced preliminary results. Here are the figures which will provide investors with an up-to-date picture of the attrac- tions of this sound form of investment.
Dividends % 1958 1957 Price
Barclays £1 .. *10 4.9 56/9 Lloyds £1 .. .. •10 ',8.6 45/6 Midland £1 .. f18 18 86/9 National Provincial £1 .. .. 20 18 90/- Westminster £1 'A' 121 *11* 45/9 District £1.. • • 17 15 71/3 Martin's 5s. .. 20 15 22/3 Royal Bank of Scot- land £1 .. .. 16 14 70/6
• Equivalent rate on Increased capital. ' t Capital reorganised and increased.
Barclays—Capital was increased by 25% scrip issue. Lloyds—Capital was increased by 50% scrip issue. Midland—Reorganised capital was 1 for 3 scrip issue. Westminster—Dividend 14% more than forecast in 1957 when capital was reorganised. District—Interim dividend of 81% forecast for August, 1959.
Martin's—Proposed 1 in 4 scrip issue. Forecast dividend 16%, payable 8% interim 8% final. 4.25 4.40 4.60 4.45 5.45 4.75 4.50 3.95
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