BY CUSTOS was very nearly 40s. or 20 per cent. below its recent peak. BURMAH on. fell to 87s., which was 30s. 6d. or 26 per cent. below its recent peak. SHELL, which has not a great Middle East risk, fell to 142s. 6d., which was about 23s. or 14 per cent, below its recent peak. ROYAL DUTCH only fell by about 121 per cent. Clearly Burmah Oil is the share to buy for a quick recovery if one thinks that sanity will be restored to the Arab world, and as I write the shares are quietly rising. My warning note about the dear price of Canadian stocks received a quick endorsement from the Bank of Canada, which raised its Bank rate from 3 per cent. to 31 per cent. With an adverse balance of trade and a huge capital inflow the Canadian authorities are becoming increasingly worried about their inflation which expresses itself above all in the price level of securities. Most Canadian stocks have been marked down and the dollar premium has also declined on selling of US Treasury bonds by the British Treasury. A possible exception to the reaction in Canadian stocks may be INTERNATIONAL NICKEL, which has just announced a 14 per cent, increase in its net profits for the first half of 1956, the net earnings per share being $3.48 against $3.04 in the corresponding period of 1955.
Copper shares have been a firm market and are entitled to a rise in view of the strength of the metal price which is now over £300 a ton. I still favour RHODESIAN ANGLO-AMERICAN at 51 to yield 6.8 per cent. on the old dividend (without the tax relief) and for a lock-up BANCROFT at 51s. 6d. SELECTION TRUST has perhaps a special attraction today because its principal source of income is a dollar one through its 23 per cent. holding in American Metal which in turn derives a large income from its holdings in the Rhodesian copper mines through Rhodesian Selection Trust. Selection Trust also holds 32 per cent. of the capital of Consolidated African Selection (diamonds) and retains large interests in the developing gold mines— Vaal Reefs, Western Holdings and St. Helena. It is a complicated set-up but at ' 90s. the 10s. shares are not unattractive to yield 6.7 per cent (without the tax relief) on the last dividend of 6s.
MINERALS SEPARATION is a holding Com- pany with a large investment in the Rhodesian copper field, but this is not the reason why I call attention to it today. It has a subsidiary called Foundry Services which supplies exothermic (heat-resisting) materials for the engineering industry. This subsidiary has branch companies on the Continent, South Africa, Canada and the US. It took a substantial interest lastyear in an American company making refrac- tory material for the steel ingot industry. This is said to be a very promising and important development. The accounts are made up to December and for 1955 the company earned 33 per cent. and paid 25 per cent. The interim dividend for the current year is due to be declared in October and to bring the two dividends into closer relationship it is intended to pay a higher interim this year. On the basis of a repetition for the year of 25 per cent. the 5s. shares at 19s. yield almost 6.6 per cent.