COMPANY NOTES
By CUSTOS
IT is not surprising that industrial ordinary shares remained firm this week in view of the bullish account of trade prospects given to the
House of Commons by Mr. Eccles in the Budget debate. The export outlook, he said, was better than when the Economic Survey was drafted and it was now clear that the UK was competitive with European prices. Domestic demand was increasing and as there was plenty of spare indus- trial capacity to meet both this and the larger demand for exports, industry might absorb part at least of the present increase in costs and prices These remarks seemed to underwrite the new 'bull' movement in industrials. The market, how- ever, remained selective and favoured shipping shares (P. and 0. in particular), overseas trading companies (especially HUDSON'S BAY) and other shares boosted by the Budget. There was also a demand for steel shares on the report that the motor industry was buying sheet steel heavily— and for BRITISH CELANESE on its surprisingly favourable merger with COURTAULDS (the best- kept secret of the year). Oil shares, in contrast with these cheerful events, reacted to the new political crisis in the Middle East.
Before my strong and repeated recommenda- tion of SHELL TRANSPORT AND TRADING was in the hands of readers last week the dividend had been declared and the price had moved up. This is irritating to both of us, but on the present reaction the shares might safely be bought. The dividend was increased to 181 per cent. tax free on the increased capital and the yield at the present price of 180s. is only 3.6 per cent., but this is better than the 24 per cent. on ROYAL DUTCH, its senior partner, and I know no better 'growth' equity for the long term. There is certainly no better inflation hedge.
Another of my New Year recommendations was a mild Canadian oil speculation—CENTRAL LEDUC and DEL RIO, now amalgamated on the basis of five Leduc for seven Del Rio and called CENTRAL DEL RIO. This is a mere mouse compared with the Shell mountain, but I have been watching it like a cat since I called attention to it at $124 for Central Leduc and $91 for Del Rio (London dollars). The present prices are $18 and $13 respectively. A Tecent progress report showed that the proved reserves had gone up from 8 million to 40 million barrels and that the total reserves and assets had an appraised value per share of $101 Canada or $204 London. I can only say that the shares remain a promising speculation, bat those who gamble in these Canadian 'wild- cats' should not he too greedy and should be quick to take profits. Another interesting specula- tion is \'AN-TOR which holds a 10 per cent. interest in the gas field of Northern British Columbia and, curiously enough, a huge underground natural reservoir south of Vancouver in which B.C. POWER is planning to store gas in the summer months when it is cheap. Van-Tor is around $94 London —a dark, promising horse.
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Continued from previous page Of all the share charts kept by the chartists, the most depressing is that for gold shares. Each month it registers a new historic 'low.' Yet it must have a bottom and as the dividend yield increases on the new O.F.S. mines the bottom must be getting nearer. For those who have no patience to wait for the next devaluation I suggest a temporary switch into platinum shares. Before the war the scarcity and high price of platinum restricted its use, but now that it is recovered as a by-product of the nickel mines in Canada it is becoming more plentiful and more widely used. About 90 per cent. of the current output from Canada and South Africa is now absorbed in industry—mainly the chemical industry (for cata- lytic purposes) and electrical equipment. I con- sider LYDENBURG PLATINUM Ss. shares at 13s. 3d. as attractive to yield nearly 8 per cent. on the dividend of 21 per cent. This company has a 26 per cent. interest in Waterval Platinum which owns nearly 40 per cent. of Rustenburg Platinum, the largest producer of platinum in the world.
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