FINANCE AND INVESTMENT
By CUSTOS
APART from a recovery in home rail stocks and a spectacular rise in diamond shares, markets still refuse to respond to the good war news. I am not surprised, nor is it at all a bad thing that there should be no excitement just now in Throgmorton Street. Leaving on one side the obvious claims on the attention of investors of the coming savings drive, there is quite enough in the immediate war prospect to justify restraint. With the spring battle season close at hand, everybody must feel that great events cannot be far ahead. So far as markets are concerned, that can only mean a cautious policy. I do not suggest that we are likely to see any substantial recission from the current level of prices or that investors with money to employ should hang back. I do feel, however, that there should not, and will not, be any great volume of speculative buying in the near future.
GOOD INDUSTRIAL DIVIDENDS
Meantime, prices are steadily supported by the profits and divi- dend announcements from the industrial front. Here we have Dorman Long, the Middlesbrough iron and steel makers, returning to the dividend list with 16 per cent, on the preferred and 8 per cent. on the ordinary capital, the leading gas companies meeting their preference requirements and making a modest payment to ordinary stockholders, one or two higher dividends in the electric supply industry, and a whole string of other increases. Taxation is a heavy charge, and E.P.T. clips the gains severely in a large number of cases, but the fact remains that net profits have increased over a fairly wide field.
Among the companies which have just announced higher divi- dends is Sir Lindsay Parkinson, the contractors. The 1942 accounts are not, yet issued, but the interim on. the ordinary shares has been doubled at 5 per cent. As the final for 1941 was 6i per cent., which made a total of 54 per cent., it seems a fair inference thit for 1942 stockholders should get at least 12+ per cent. These LI ordinary units, standing ct 32s. 6d., would thus offer a yield of about 71 per cent. In 1939 the dividend was 131 per cent. and 181 per cent. was paid for 1938, so that there is scope for further improvement. In view of the promising post-war prospects for a business of this kind, the units look a good purchase for yield and capital appreciation.
A STORE'S PREFERENCE
For the speculatively-minded less interested in immediate dividend yield than the chance of a rise in capital value, the Li cumulative to per cent. preferred ordinary units of Selfridge Holdings) seem good. This company holds all the share capital of Selfridges, whose accounts for 1942 are due to be issued in the near future. Like other West End stores, Selfridges has doubtless enjoyed a good recovery' in earnings, and it is now strengthening its financial position. For me present, the dividend it pays to the holding concern is not likely to do more than cover a small payment on the 6 per cent. preference stock of Selfridge (Holdings), which is in arrears from Mdrch 31,1 1939, but the longer-term outlook is promising. With arrears dating back to September, 1938, the Li preferred ordinary units are quotcd around ios. 3d.
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