18 MAY 1944, Page 22

FINANCE AND INVESTMENT

By CUSTOS

IF markets have lost some of their momentum after their steady advance since Budget Day, they give every indication of being well able to consolidate around the current level. Investment moral is high, there is plenty of money available for a total volume of securities which, apart from the Government's tap loans, is strictly limited, and the technical condition of markets is immensely strong. These are some of the manifestations of a rising national income in a so-called " closed " economy, and they seem to me to point to the probability that the advance in security prices will go farther, on selective lines.

As I have -often emphasised in recent months, the scope for improvement is now limited in the case of good fixed interest stocks since interest rates themselves have virtually grounded and, by the same token, one should not look for any substantial rise in leading industrial ordinary shares offering low yields except where one is dealing with a really dynamic equity. The best opportunities still remaining for capital appreciation seem to me to be found in second-grade industrials with better-than-average yields, depressed shares and bonds, and developing mining propositions. Here the chances are mixed up with risks, and courage, foresight and patience are needed to bring results.

FORD MOTOR POSITION

The full accounts for 1943 of the Ford Motor Company will reinforce investors' confidence in this undertaking. While there is no great change in trading profits, now held down by E.P.T., the 6 per cent. ordinary dividend is again covered by earnings of nearl. 12 per cent., substantial allocations are made to reserves, and the liquid position is again impressively strong. The carry-forward Ot £1,354,805 compares with an issued ordinary capital of L5,000,ono The company is well equipped, both technically and financially, to take full advantage of post-war trade opportunities over a wid field. It is not surprising, therefore, that at 34s. 6d. the Li ordinar stock units are priced to yield only 31- per cent. In spite of this low return they should be well worth holding for the long view.

MINING FINANCE PROFITS

Rising market values, providing better opportunities for the makin of capital profits, are doubtless responsible for the jump in the earn ings of the Central Mining and Investment Corporation. This Ka& finance house shows profits for 1943 at £1,037,764 after placir L5o,000 to inner reserves. The increase over 1942 amounts to abju L400,000, and although taxation has absorbed L35o,000, again, £180,000, the board has been able to supplement the 71 per cen: dividend by a 2-1- per cent. cash bonus. At the same time the trars fer to investment reserve has been maintained at Lioo,000 and further Litoo,000, against nil, goes to exploration reserve. At -£r Centril Mining £8 glares are yielding just over 44- per cent., les tax at about 6s. 4d. in the £. In view of the strong financial positio' of the company's interests in developing mines the shares do appear to be over-valued.