28 FEBRUARY 1969, Page 22

Market report

CUSTOS

After a major shake-out- -share prices down 9 per cent in the first two and a half weeks of February—the equity market has found its equilibrium again. There are, after all, some bullish factors to be observed. The am survey of industrial trends was about as encouraging a document as that body has ever produced. It showed that exports are still rising sharply and that spending on capital equipment is up at last. Moreover, the unemployment figures have fallen back again and recent results (like those from ICI) show that industrial profits are still going ahead pretty steadily.

Commenting on the market's behaviour this mond'. London brokers Simon & Coates say that the recent set-back was one of the "largest falls • recorded over such a short period in recent years. They go on to comment that one characteristic of sharp breaks is the indiscrimin- ate nature of price falls. First-class stocks have suffered equally with those in the secondary grades. They say that there is a case for 'buying

down' some of the defensive blue chip counters. Among them are—Metal Box, which is 19 per cent down from its 1968-69 peak and now sells at 15.1 times earnings; BICC, which is 15 per cent down from its peak and sells at fourteen times likely 1969 earnings, and Cour- taulds, which is 21 per cent down from its recent high point and sells at fifteen times prospective earnings.

Simon & Coates also has an interesting list of current recommendations. They name Cam- mell Laird despite the news that submarine work is to go only to Vickers in future; Ductile Steels on the recent steel price increases; Rear- don Smith on its asset backing of 25s 10d a share compared with a current price of lOs 10Id; and Ross Group on its interests in poultry and frozen foods with bid prospects in the share price for nothing.

Gilt-edged securities have also been a little happier this week. The good impression created by the January trade figures lives on, though it will unquestionably take another good set next month to get this market moving up again.