Investment Notes
By CUSTOS
Acrivrry on the Stock Exchange has greatly increased and the equity share markets have been trying to break through the previous high level of 359 reached by the Financial Times index in May last year. It very nearly succeeded- having topped 358-but the news of fresh restric- tions on hire-purchase trading and warnings about a tough budget from the Prime Minister brought in rather more sellers than buyers. All the same a rise of 14 per cent since the low point of July last year is no mean recovery. The hire- purchase squeeze falls mainly on the domestic electrical appliances, radio and TV sets and carpets where the minimum deposits are being raised from 15 per cent to 25. Those on furniture and mattresses go up from 10 per cent to 15 per cent; water heaters and cookers remain at 10 per cent. Cars and motor-cycles remain at 25 per cent but the repayment period has been cut from thirty to twenty-seven months. Hire-purchase business had started to fall in December when the total hire-purchase debt fell from £1,199 million to £1.196 million. The market had been expecting these restraints and the leading hire- purchase finance shares were not greatly affected. But as I explained some time ago the time has not yet come to buy hire-purchase finance shares, although yields from 5.3 per cent to 7.7 per cent can be obtained. For that matter I would not rush into the market for any equity share unless and until the Financial Times index breaks through its previous high in a really con- vincing manner.
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