Market report
CUSTOS
President Johnson's measures in defence of the dollar began the London market's new year with a disagreeable shock. Their implications— economic warfare, slower recovery on the balance of payments, higher interest rates in Europe—are bad for equities and gilt-edged alike. Hotel shares suffered most, on fears for the tourist trade.
This is the season of bank and discount house reports: three of the clearing banks—Barclays, Lloyds and National Provincial—announce their figures today. Martins, whose results appeared on Monday, paid a higher dividend on a slightly lower declared profit, and seemed to disappoint the market. Banks gain from high interest rates, and discount houses lose. Union, the biggest discount house, and National, formerly the second biggest—it is thought to have been overhauled by Cater, Ryder—report next week.
In this difficult period the defensive qualities of Union, which has exceptionally strong inner reserves, come into play; and at 46s 6d, where it yields 5.3 per cent, it looks the most attractive stock among the discount houses. King and Shaxson is understood to have weathered the storm better than most, but this is reflected in its low yield of 3.8 per cent. Gillett Brothers, yielding 4.7 per cent at 53s, may be overvalued. It is One of the houses which have bought pre- ference shares to give franked income: with interest rates at their present level, these hold- ings must be showing a loss.
Highest yielder of all is National, whose B shares return 6.2 per cent at 40s. This is the only discount house to have cut its dividend in recent times. Its published profit record suggests that it does better than the market in good years, and worse than the market in bad years.
Company notes
A strong report comes from International Computers and Tabulators. An increase in turnover of some £31 million has put the pre- tax profit up from £2,331,000 to £3,029,000. The tax charge rises from £428,000 to £711,000, after crediting tax allowances and reliefs: more are carried forward for future use. Export sales made up £14.4 million out of the £66.8 million turnover, of which £20 million represents rentals.
At Coventry Gauge, Sir Stanley Harley looks back over a year in which profits before tax slipped from £662,716 to £650,464. It has been a year of declining orders in the machine tool industry, but Sir Stanley points with pride to a Russian order, the largest ever placed by the state agency concerned. 'This contract provides a base load for our machine tool productive capacity for the next three years.' The dividend is held at 17 pet cent.
John Bull's portfolio
John Bull is abroad. Here is the state of his portfolio, at 3 January: 100 BAT at 99s
• • £495 100 Empire Stores at 60s • • £300 50 Phoenix at 160s .. • . £400 225 Lyle Shipping at 19s 6d
£219 600 John I. Jacobs at• 8s 3d .. • • £247 100 Unilever at 44s 3d .. • • £221 £2,000 War Loan at £493 • • £985 150 Witan at 29s 3d .. • • £219 100 English Electric at 52s 9d • • £264 100 E. Scragg at 50s 9d
£254 Cash with local authority at 73 per cent £1,503 Total f5,107.
Previous page
