Financial Notes
AVIATION AND ARMAMENT SHARES.
ALTHOCGII business in the Stock Markets during the last few days has tended to be specially active in the shares of Aviation and Armament companies, a fairly firm tone has characterised the Stock Markets throughout. If we consider the satisfactory dividend announcements, Home Railways have been a little disappointing, but that has been largely due to the uncertainty with regard to the increased cost of wages. British Funds and kindred stocks have kept wonderfully .firm considering new issues of capital, for the prime factor continues to be cheapness of money. • Home In- dustrial shares,- and especially the shares of Iron and Steel eonaptinies,' have continued to improve notwithstanding the fact that the Trade Returns for January were disappointing.
* * * * FRENCH STERLING CREDITS.
Not the least interesting feature of markets during the past week has been the definite arrangement of large sterling credits here for France. British bankers have agreed to give credits. for France, over a possible period.of nine months, to the amount of £40,000,000, which is larger by £10,000,000 than the previous big Loan of three years ago. Now, as then, the accommodation is apparently required in connexion with Budget difficulties, and, while it is true that these diffi- culties are of a serious character, part of the embarrassments of the French Government appear to be due to the imperfect machinery of the Money Market in that country. In France, as in England, there is an -awkward gap to be bridged between the outflow of necessary expenditure and the inflow of taxes. In this country, the difficulty is easily overcome by tem- porary borrowing from the Bank of England or from Govern- ment Departments, but these-facilities do not exist in the same measure in France, and • hence some very awkward corners have to be turned. It. is a little difficult in the present instance to determine the precise measure of security held by the banks in return for this large accommodation, but we have assurances that the Exchange between France and Great Britain is not to be disturbed .by the operation and; doubtless, the Bank of England and the Bank -of France between them have means for avoiding such disturbance. it should be clearly understood, however, that the operation is one entirely concerned with the British Banks and the
French Government though the operation clearly has till- consent and goodwill of the British Government. Nor, perhaps, should it be forgotten that there have been some previous occasions when similar accommodation has been granted to this country or rather to the Bank of England by the Bank of France. • * * * * ABBEY ROAD PROGRESS.
The latest annual report of the Abbey Road Building Society shows that the past year has again been one of steady progress. It will be remembered that last April, owing to the growing demand that the benefit of cheap money should be mach- . available to those interested in house purchases, the Directors reduced the rate of interest charged to new borrowing members purchasing for their own occupation, to 41 per cent. per annum. They further decided to continue the rebate of interest to old borrowing members, and have provided for that rebate in the accounts. This policy necessarily affected the rate paid by the Society to its shareholders and depositors, and as from July 1st last the yield on share accounts has been at the rate
• of 3i per cent. per annum and deposit accounts at '21- per cent. per annum net and free of liability to Income Tax. It has been found necessary still to restrict the amount which may be invested in share accounts, but the restrictions on deposit
accounts have been removed.
- * * * * CONTINUED GROWTH.
The number of shareholders and depositors now stand at 267,617. The Share capital and Deposits amount to £43,825,677. Advances made during last year total £7,282,501. Assets aggregate £46,131,623, of which Mortgages secured on 77,127 properties total £40,273,252. Approximately 95 per cent. are occupied by borrowing members. After providing for the above-mentioned rebate of interest to borrowing members amounting to £103,685 ; for Income Tax amounting to £210,913 and for all Expenses, Depreciation, Interest and Dividends, the Directors have placed £250,000 to Reserve Fund No. 1, raising it to £1,750,000; have maintained Reserve Fund No. 2 at £250,000, and carried forward a balance of £75,891. * * * * NEW CAPITAL ACTIVITY.
During the past week, further tests have been applied to investment resources in the shape of fresh issues-of capital. Quite the most important of these has been the large Con- version operation by the Kingdom of Belgium. That country had outstanding a large 7 per cent- Lerair the repayment of which has recently been announced. So far as this country and Holland are concerned, Conversion was _offered into a new 4 per cent. Loan at the price of 981. The Conversion offer was made through Baring Brothers, Morgan, Grenfell and Co. and the Westminster Bank. Cash applications at the price named were also invited, and large as was: the Loan, the response was immediate, the Lists being closed for all three banking firms within an hour of the opening. - Another very successful issue of the week was the offer of Lanarkshire County Council 8 per cent. Stock for £2,000,000 at par; the Subscription List was closed within a few minutes of the opening.
* * * * . . . COURTAULDs' PROFITS.
ShareholderS in Courtaulds Limited do welt to give attention to the forecasts given by the Chairman at the annual meetings of future results. At the annual meeting last year- the Chair- man made sober estimates with regard. to the. - dividend pro- spects indicating that current trading conditions did not warrant the expectation of a higher total distribution for the year than was made for 1934. These estimates have been borne out by the recent announcement of the final dividend of 5 per cent., making 7 per cent. free of tax as for the previous year. Nevertheless, the market professed some disappoint-
ment although the decline in profits was trifling. * * * * THOMAS TILLING.
The latest arnual report of Thomas Tilling Limited has provided cheerful reading for the shareholders, the net profit for the year, after providing for depreciation, (Ire- being £363,452, compared with £297,410 for the previous year. The Preference Dividend calls for £16,500, while the Ordinary Dividend, it must be remembered, is paid on twice the capital which received 15 per cent. for the year 1934, owing to the share for share bonus issue made at that time. Consequently, the present dividend of 10 per cent: takes £263,675 of the balance of £277,829, and an amount of £101;392 is transferred to Reserve, which also receives a transfer of £548,846 from special Capital Reserve in order to make up a total of 2959,250 required for a further 25 -per cent. capital bonus. That is to say, one new shire for every four held. There will then be a • balance of £176,436 to carry forward. The bonus issue will require in increase in the authorised Capital which is being
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