Financial Notes

REACTIONARY MARKETS. . •

WITH the exception of British Finds and kindred stocks,: ant perhaps also South African Mines, a reactionary. tendency has characterised the Stock Markets during the past week: Politics have once again been a factor, while excessive specula- tion in aviation shares and in some of the industrial shares has been responsible for the creation of some weak position4, the liquidation of which has occasioned. a moderate set-back both in aviation shares and the shares of some of the iron- and steel companies. The fact is that the Stock Markets con- tinue to be-under two quite opposing influence.s. On the one hand, the continued cheapness of money-acts as a spur to an upward movement in prices generally; while, on-,the other hand, the-disturbed political c mditions in Europe every now and then act as a restraining and. even a depressing influence. Weeks and untiths go by during which the Stock Markets profess to disregard the political outlook altogether, but every now and then there are some unpleasant awakenings to political realities, and these are usually accompanied by a set-back such as the one we are now experiencing.

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SCOT7'ISII PROVIDENT.

The meeting held on Tuesday last of the Scottish Provident Institution was the ninety-eighth in its history, so that the Scottish Provident is approaching its centenary. The latest Report is a most excellent one, exhibiting a fresh high record as regards the amount of new business transacted for the past year. Policies during the year totalled £3,470,222 in sums assured, as compared with £3,298,729 in the previous year. The total premium income, including the amounts paid for purchases of annuities, was £1,444,000, and the total income, including interest, was £2,345,000. The Funds, which at the end of last year amounted to £24,456,919, showed an increase during the year of £467,284. A sum of £100,000 was added to the Investment Reserve Fund, increasing it to £600,000. The net rate of interest earned on the funds showed a satisfactory improvement at ia 15s. 8d. per cent., calculated on the total Funds, including_the Investment Reserve. This marks a rise of ls. ld. per cent. net as compared with the previous year. The expense ratio was 16.6 per cent. of the premium income, a satisfactory ratio when it is remembered that under the Institution's " distinctive " system the scale. of premiums is low; the bonuses for whole-life policies are allotted on a tontine principle whereby participation-is deferred until the time when the preiniums paid, accumulated at 4 per cent. per annum, reach the amount of the original insur- ance. Policies in the special Endowment Assurance Fund receive reversionary compound additions in respect of each year's premium paid. The next bonus distribution is due as at the end of 1938.

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AN EXCELLENT DIVIDEND.

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Although the Market bad been looking fora .good dividend on the Shares of A. W. Gainage, the results announced during (Continued on pale 378.) Financial Notes (Continued from page 376.) the past week were even better than - expected. The pre- liminary statement. fOr the year to the end of last January showed a rise in net profit of £24,221 to £84,535. Accordingly, the directors have declared a final dividend on the Ordinary capital of 71 per cent., together with a bonus of 5 per cent., making 15 per cent. for the year. In the two previous years the dividend was 9 per cent. -The 10s. shares rose sharply on the announcement to about 27s.-6d., at which price they give a yield of well over 51 per cent..

• 's AN INSURANCE BONUS.

The NVesleyan and General Assurance Society announces that, following a strengthening of the. valuation basis, the Directors have declared reversionary bonuses on the Ordinary Department with-profits Policies at rates of £1 18s. per cent. on original sums assured for Endowment Assurances, and of £2 4s. per cent. for whole-life Policies. In 1934 the corre- sponding rates were £2 and £2 6s. per cent. In the Industrial Department additions are to be made toetht sums payable on claims arising by death or maturity • betweerrApril 7th, 1936, and April -5th, 1937, inclusive. All Policies- on which premiums have been paid for ten coaplete years, excepting Guaranteed Bonus Policies and Paid Up Policies for less than the full sum assured, will be entitled to benefit. The -additions will be 21 per cent. of sums assured for Policies of ten years' duration, increasing by l• per cent. for each subsequent year's duration up to a maximum of 10 per Cent. for Policies of forty years' duration and over.

Pitoprrs FROM BRICKS.

71) to the present there seems to be little falling off in building profits, and the latest Report of London Brick and Forders shows that there was a slight increase during the past year from direct trading and income from Subsidiaries, although the previous year's profits had established a record at X563,474; interest and income from investments bring the total this year up to £593,510 against £585,820 in the pre- vious year. The net profit also shows an increase and the balance-sheet is a strong one. After paying a dividend on the Ordinary Shares of 221 per cent., there is a carry forward of £274,467, being about £24,000 more than a year ago. It is proposed to increase the capital and to issue 200,000 new Ordinary Shares at par to shareholders in the proportion of one new share for every £8 of stock now held.

- BANKING IN AUSTRALIA.

Notwithstanding low interest rates, trade conditions in Austinlia are showing improvement ; and this is reflected in the latest dividend statement by the Bank of Australasia, the final dividend declared of 4s. 3d. per X5 share bringing the rate of dividend for the past year up to 7.1 per cent., against 7/ per cent. for the two previous years. It may be recalled that prior to the great depression in Australia the dividend was 14 per cent., free of tax, but since 1930 the distribution has been subject to tax and at one time fell-to 7 per cent.

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DISAPPOINTING TRADE FIGURES.

The year 1936 has not begun well in the matter-of our foreign trade. It . is true that Imports..for the month. of January showed the large increase of £8,000,000 compared with the same month in last year, but Exports were down by nearly £2,000,000 and the Visible Adverse Trade Balance of over £31,000,000 was nearly £10,000,000 worse than for January of 1935. To some extent high prices _affected the large total of Imports but it was scarcely a good point that much of the increase was in foodstuffs, while an unfavourable feature of the Exports was the heavy decline, in',shipments abroad of-coal. This, however, in its turn, was largely due to the application of " sanctions " to Italy so that . the value of our shipments of coal to Italy for January was about £6,000 as compared with £340,000 in the same month of last year. Indeed, for the final quarter of last year the total value of our Exports to Italy was only £900,000 compared with £2,800,000 for the same quarter of 1934.

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THE DIRECTION OF TRADE.

Accompanying the Trade Returns for January, there is always given an Analysis of the General Direction of Trade throughout the previous year. This Analysis shows, among other things, the ,relative proportion into which our total trade is divided as between the Dominions and foreign countries. Last year, our total imports expanded from 731 to 757 millions, and British Exports went up from 369 millions to 426 millions. Of this increase in Imports, the Dominions provided 23.6 millions and the proportion of Imports derived from Empire sources went up from 37.1 to 37.5 per cent. In the case of

Exports of British goods, the value received from the Dominions rose by 18.7 millions while the amount sent to foreign countries rose by 11.2 millions, the proportion of Dominion purchases having risen from 46.9 to 48 per cent. of the.whole.

A. W. K.