INVESTMENT NOTES
By CUSTOS ON Monday there was a tremendous turnover of buying and selling on the Stock Exchange with a record business of over 20,000 shares. The new buyers and the profit-takers were evenly matched for most of the day but in the end the sellers just predominated and the market turned easier up to Tuesday. afternoon. The opening on Wednesday was a scene of great excitement. The brewery market was caught unprepared and job- bers were quoting prices from 2s. to 5s. up. In other markets the rises were more reasonable, but one of the most striking was that in Alfred Herbert, the machine-tool makers. On the morn- ing before the Budget a line of 50,000 shares at 1 s. under the market proved difficult to sell. On Wednesday the line had gone and the price was 3s. up. The Chancellor's emphasis on investment spending was, for the City, one of the most im- pressive features of the Budget. (It supports my recommendation of AEI.) Store shares, durable goods shares, commercial vehicles and motors all attracted buying. The result was that the Financial Times index of ordinary shares went through its previous high of 225+ reached at .the end of last year. The Chancellor in no uncertain fashion has restored the 'bull' market.
Oil Shares The oil dividend season may be pleasantly re- assuring but it is not expected to bring investment support back into the oil share market. Americans have been selling the international oil equities for the simple reason that they prefer shares that go up and it is hardly likely that investors will want to buy SHELL or BP when Iraq is going Com- munist and Washington is imposing quotas for American oil imports. Shell did well to maintain 181 per cent. tax free on the capital increased by the heavy `rights' issue early in the year. Because of lower selling prices the group's net income for the year fell by 30 per cent. to £151 million, al- though the volume of sales was 5 per cent. up. The only encouraging feature was a 45 per cent. recovery in net profits in the last quarter if allow- ance is made for the extra taxation imposed retrospectively by Venezuela and paid for in one lump sum. Economically the international oil position may be improving, but politically it is worsening and the market is showing the effects of investment neglect. Shell at 141s. 3d. yield 4.6 per cent.
The Times Furnishing
The stores are among Mr. Amory's beneficiaries. The temporary setback in TIMES FURNISHING on disappointment with the profit statement was soon overcome, for it was obvious that profits for 1958 had gone up, not down. The company had enjoyed a rapid expansion in hire-purchase trading in the last four months of the year. In accordance with the conventional bookkeeping of hire- purchase companies, provision was made for the unrealised profit on the hire-purchase debt and this amounted to £334,341 against only £58,340 in the previous year. Adding back this provision to the profits of the group before tax it will be found that last year's gross was £1,136,000 against £967,000 in the previous year. The chairman should explain this point at the meeting on May 1 and give some indication of the current year's improved earnings. At 22s. 6d. ex dividend the shares yield just 5 per cent, on the basis of last year's distribution of 224 per cent.
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