BAT bowled out

PORTFOLIO

• s JOHN BULL Mr Jenkins's enormously tough Budget does not, I am pleased to say, do much damage to my first portfolio. On 6- October the FT ordinary index stood at 390.4; as I write it is 3.2 per cent higher at 403.0. On that basis the value of the portfolio should add up to £5,160 before ex- pences : in fact, as you see, it is £5,495.

British American Tobacco makes most of its profits abroad; so the Budget means little to.this company except that a recent acquisition, Yardley, will be hit by the increase in purchase tax on cosmetics. More seriously, it is President Johnson rather than Mr Jenkins whom BAT'S • shareholders must watch: will the President's 'austerity' programme have unpleasant implica- tions for the company's very large us interests? Having bought the shares at 84s, I have a decent profit with the price at 108s 9d, Stich I have decided to take. I have therefore sold my 100 BATS. Selling expenses amount to £7.

Empire Stores: on the face of it, you would expect -mail order houses to wilt before the on- slaught on consumers pockets. I keep these shares, however, relying upon the fact that mail order, with its free twenty week credit arrange- ments, often gains when other sectors of the retail trade meet hard"times.

Phoenix Assurance: still, in spite of a rise in the share price- from 141s 3d to 18Is 3d since I bought the shares, the most undervalued counter in the insurance market—and ripe for a bid.

Lyle Shipping: I am waiting for the next re- sults, which should be good, before making up my mind about the company, which has been a dull performer since the shares entered the portfolio.

John L Jacobs: very good figures announced earlier this week: the dividend total is 12-} per cent against 111- per cent as forecast. Profits before tax rose during 1967 from £357,000 to £594,000, all the increase coming in the last quarter as a result of post-Suez shipping rates.

Worth keeping at least until the report. • Unilever has risen very strongly since the results: not enough of its business is conducted in the United Kingdom for much harm to come to the group from the Budget. I keep these.

War Loan: continually disappointing, the international monetary crisis, with its depress- ing effect upon the pound, has driven back the price to the point where I stepped in imme- diately following devaluation. But the Budget has cheered the gilt-edged market up. More patience needed.

Witan: Witan's substantial holdings in Ameri- can stocks will be sensitive to retrenchment in the United States. For the time being I am a cautious holder.

E. Scragg: splendid exporting company (tex- tile machinery) with a marked cyclical pattern to profits: worth staying for this particular phase of the switchback. '

John Brown will soon be primarily a machine tool company, which is a depressed sector at the moment so far as profits go. What I have my eye on is the fact that order books have started to lengthen again and that devaluation should boost overseas very considerably.

Barclays Bank: high bank rate means high profits, which prospect is not fully discounted in the share price.

Throgmorton Secured Growth (capital): the shares are technically depressed, which is why I bought them some weeks ago.

National and Grindlays: as anybody who has read the recent report or noted the higher divi- dend knows, the aims are cheap.

Clarkson (Engineers): machine tool makers —see John Brown.

Valuations at 20 March 1968 First Portfolio

100 Empire Stores at 57s '6d .. • • £287 50 Phoenix at 181s 3d • • £453 225 Lyle Shipping at I9s 9d .. • • £222 600 John I. Jacobs at 8s 144 • • £244

100 Unilever at 60s .. . • £300 £2,000 War Loan at £48i- £977

300 Witan at 16s 74,4:1 xc • • • . £249

.100 E. Scragg at 74s 3d .. • • £371 250 John Brown at 35s 3d .. £441 100 Barclays Bank at 71s 3d £356 200 Throgmorton Secured Growth

(Capital) at 15s 41d £154 100. National and Grindlays at 52s 9d xd £264 500 Clarkson (Engineers) at lOs 6d .. £262 Cash with local authority at 7i per cent £915

£5,495 Deduct : previous expenses £101 This week's expenses £7 Total £5,387

• 'kale: the figure for Cash with local authority in- cludes £544, the product of the sale of 100 BATS.

Second Portfolio 100 Guardian Assurance at 39s 9d xc £199 40 Royal Exchange Assurance at 105s £210 Cash in hand .. £4,573 £4,982 Deduct : expenses £12 Total £4,970