FINANCE
The sinews of industry
ROBERT BELL
Robert Bell is secretary of the Belfast Stock Exchange.
The Belfast stock exchange is a member of the Federation of Stock Exchanges. It is the only exchange in Northern Ireland, and its membership totals thirty-four. Although its membership is small in comparison with London and the regional exchanges, it plays an important part in the economic life of the province.
Without a steady supply of new money, industry and commerce in Northern Ireland would find it difficult to grow. At the same time investors of all kinds are looking for ways in which to invest their money to the best advantage. The committee offer every assistance to companies anxious to obtain fresh finance for expansion. The require- ments for a quotation in the Belfast stock exchange list are the same as for other exchanges in the federation.
The exchange has given considerable help to the Northern Ireland government, Belfast corporation and public boards when they were raising finance by public issues of stock. There is an active market in British government securities and a member firm of the exchange provides a dealing service in a number of these stocks. Of great advantage to investor and broker is a register for a large number of these in the Bank of Ire- land, in Donegan Place, Belfast.
Another member firm acts as shunter/ jobber in a number of leading equities. Bel- fast brokers can deal with their own shunter/jobber, or a shunter/jobber in other associated exchanges, or through their Lon- don correspondents.
The importance of the Belfast market is shown in the official list. Many of the lead- ing banks and industrial groups have applied for and been granted quotation in the official list of the exchange. Allied Irish banks, Bank of Ireland, Midland and National Westminster Banks, Courtaulds, Ranks Hovis McDougall, Bass Charrinston, Distillers, Guinness, Marks & Spencer, Gallahers, Imperial Chemical Industries, Imperial Tobacco, Burmah Oil, Shell, Ultramar, Dunlop, International Paint, Kenning Motor Group, Northern Dairies and Unilever. There are also a number of Ulster companies with a share quotation in the Belfast List. Unfortunately as a result of mergers and take-overs the number of locally based companies has been much reduced in recent years, eg Northern Bank Ltd, Moy- gashel, Inglis & Co, Robertson Ledlie Fer- guson & Co. But this has been going on for a number of years, and is in keeping with the modern trend for larger units. There would be a more active market in Belfast if there were more local stocks to deal in; nevertheless, being part of a large group brings, in some cases, advantages to the local company of a world-wide sales organi- sation, research and obtaining finance.
Belfast brokers have taken advantage of a computer service for the valuation of estates and the share portfolios of clients. Although they deal with institutional in- vestors and unit trusts, a large part of their business is with individual clients. Relations with the Northern Ireland government and Ministries are cordial and cooperative.
Investment is a highly personal business, and the existence of a stock exchange in Belfast enables Northern Ireland investors to have direct contact with their stockbroker. This engenders a mutual understanding which most stockbrokers feel is vital before they can really serve their clients to best advantage. The number of firms has dwindled, because of amalgamations, fol- lowing the general pattern in the uic, but the volume of business for a small stock exchange is considerable. According to the total of members' turnover published in the press since the beginning of 1969, the average turnover each month is around f6 million.
As a result of discussions on the lack of opportunities to invest money in Northern Ireland and the lack of facilities to channel finance into local industry, the Northern Ireland Industrial Development and Finance Corporation was established approximately ten years ago. It is a subsidiary of the Lon- don and Yorkshire Trust, the London issuing house. Because of the tendency among local companies to obtain finance from the banks, and the fact that a large number of companies operating in Northern Ireland are small, the corporation has not yet handled a local public industrial issue of shares. It is unfortunate that the recent unsettled conditions in Northern Ireland may well further postpone this. It is also a factor in arranging mergers and acquisitions. A merger of some of the Northern Ireland companies could lead to greater efficiency and growth and fresh finance could be more easily obtained. The merger of these com- panies and subsequent growth in size and profitability could leave the way open for a public issue.
The corporation has had success in rais- ing additional finance for private companies. In doing this the companies concerned have expanded and provided additional employ- ment in Northern Ireland, a region with an unhappy record of large unemployment.
Raising finance for companies is not the only service which the corporation provides. Advice is available to companies in regard to efficient financial control and estimating future financial needs. This is of obvious importance in planning and assisting the progress of the business and avoiding pos- sible future difficulties.
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