Having discussed the prospects of Perak River Hydro- Electric Power in relation to expanding tin-output a year ago, I feel constrained to reconsider the position now that tin mining activity, the guide to this company's fortunes, has been so severely restricted. Obviously, the rate of earnings must have declined in recent months, but so has the price of the shares. Against a " high " of 34s. 9d. last year, the current quotation is 225. 6d., so that the yield on last year's 7 per cent. dividend is now over 6 per cent. Does this discount the risks adequately ? I feel that the answer is, yes. The company has greatly improved its plant equipment in the past two years, its capital has been drastically scaled down by • a reconstruction scheme, and its finances strengthened.
The next accounts, for the year ending July 31st, will cover a rather mixed period, which began reasonably well, tailed off in the autumn, and, so far as one can see, may not show any sharp improvement in the last half. It would clearly be wise, in the circumstances, to budget only on a repetition of last year's 7 per cent. The speculative attrac- tions lie in the possibility of a quick recovery in the price of tin, leading to an expansion in tin-output, whenever America, the largest consumer, throws off her depression and stages • a business revival. In that event, which is surely not unlikely, Perak River's earning power would respond quickly, and so would the price of the shares. Meantime, as a speculative holding, they have the merit that they pay reasonably well