FINANCE AND INVESTMENT
By CUSTOS
IF ever there was news which should have stirred the stock markets, it was surely the announcement of a " tremendous success " at the Moscow Conference. Yet somehow investors have refused to take their cue, and markets have continued to drift aimlessly without getting anywhere in particular. One safe inference is that uncer- - tainties arising out of the Moscow talks have not been the only restraint on buying in recent weeks. What, then, are the others? In my view, investors are holding back partly because recent war developments are widely thought to have brought victory well within sight and partly because prices in many groups of securities are already at a level which offers little scope for further improvement in relation to prospects as they are now viewed. In short, most would-be buyers are beginning to realise that peace will bring its problems as well as its blessings, and that Stock Exchange prices, taken by and large, are already fairly high. Having said that, I would add that I do not expect any substantial setback in quotations and that there is still scope for improvement on selective lines.
HOME RAIL REVIVAL In the under-valued category I would certainly include home rail junior stocks even after the recovery which has just lifted quotations by anything from II to 3 points. Without reading into Lord Leathers' survey of post-war transport possibilities any firm assur- ance of railway prosperity, I feel that one is justified in revising one's assessment of the peace-time risks. When yields range between 64 and 74 per cent. any official statement which suggests that the railways are to be helped to maintain a sound financial position is surely a cue to would-be buyers. Holders of rail stocks have good cause for seeing things through.
T.P.D. TAXES
At long last shareholders in Trinidad Petroleum Development, who for three years have been groping in darkness, can be given light on the company's tax position. In his statement accompanying the latest accounts, Mr. Kenneth Moore discloses that the E.P.T. position has been cleared up, except for minor adjustments, and that the settlement is reasonably favourable from the shareholders' standpoint. Thanks to the ample provision made in recent years, there is now Li5o,o0o to be released from taxation reserves, and the chairman intimates that the standard profits and allowances as now ascertained cover the current 15 per cent, dividend with .a modest margin for building up reserves for future development. As news from the property itself continues to be satisfactory, the Li share!, priced at 75s., to yield 6 per cent., allowing for tax deduction at only 5s. in the L. are a good holding.
A GOOD YIELD Among the companies now doing well, whose post-tear prospects look promising, and whose shares are offering a generous yield, Spurling Motor Bodies are worth examination. At present a Jo per cent. dividend is being paid out of earnings of 17 per cent. on the 4s. shares, which stand at 6s. 3d. The return is therefore about 6-1 per cent. The company makes bodies for all types of commercial vehicles, acts as official distributor for the popular " Bedford," and has recently taken up the distribution of another product on a munerative basis. Without allowing for the possibility that tae dividend will be increased for the current year, the post-war outlo.)k seems to me to be good enough to justify an improvement from today's level. The company has a sound balance-sheet and al,:rt management.
Previous page
