Financial Notes

OUTLOOK FOR INDUSTRIALS.

THE general tone of the Stock Exchange remains irregular, with a decidedly easier tendency in gilt-edged stocks and considerable attention still devoted to " conunodity " shares of various kinds. Between these two extremes industrials have' maintained a steady appearance, although without the buoyancy exhibited a few months ago. The main sustaining factor in this market is the continued evidence of activity in home trade and the knowledge that the great majority of industrial undertakings are doing exceedingly good business. In many cases, indeed, it is a question of fulfilling orders rather than of obtaining them. For the moment, therefore, the industrial outlook may be considered encouraging.

THE COST FACTOR.

The new factors introduced into the industrial picture by the general advance in commodity prices should, however, not be ignored. Wholesale prices have now risen substantially, and are beginning to affect retail values, and such a process cannot continue for long without raising the question of wage rates. Industrial companies, therefore, may soon be faced with rising costs not only for raw materials but for labour, and since many undertakings have already reached the limit of their output capacity, increasing production cannot be relied on indefinitely as an offset to smaller profit margins. All the same, there can be no doubt that the reports for 1936 to be issued by industrial companies during the coming months will make an excellent showing. Meanwhile, some of the doubtful factors in the situation, combined with the high levels already attained by share prices, are probably responsible for the slightly less exuberant tone of the market within the past week or so.

* * * * DISCOUNT MARKET CONDITIONS.

The conditions under which the London Money Market does its business and earns its profits have greatly changed within recent years. The commercial bill has been replaced by the Treasury bill, while at the same time the Government's cheap money policy has tended to stabilise profit margins on ordinary discount business at a low level. As a result, and in order to maintain business on a profitable basis, discount brokers have come to deal more in short-term Government securities than formerly, a fact which largely explains the wide fluctuations in profits earned by the joint-stock discount houses during the past few years.

* * * * ALEXANDERS DISCOUNT COMPANY.

In the case of Alexanders Discount Company the net Profit for 1936 was £164,500, which compares with £285,062 for the preceding year and with £403,477 for 1934. The large earnings of the two earlier years, however, were the result of the rapid advance in prices of Government securities which was then in progress, and this was recognised in the large transfers from profit to investment reserves which were then made. With profits on discounts still narrow, and Government securities tending to decline in value, profits for the past year have merely relapsed to what may be considered a more normal figure. The total dividend has been maintained at the satisfactory level of 19 per cent.

* * * * TURNER AND NEWALL PROGRESS.

A remarkable account of rapid progress on sound lines was given to shareholders of Turner and Newall Limited at the recent, annual meeting. This progress was evident in

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Financial Notes

(Continued from page 151.) the detailed account given by Mr. Samuel Turner, the Chairman, of the development of the business and various products of the company, and even more so, perhaps, in his account of the uses for the new funds raised by the recent highly successful issue of new shares to shareholders. A new mine is being developed in Swaziland, a further company is being acquired and has been reorganised, additional factories are being built in India, and output at home increased. Shareholders, however, were reminded that the asbestos industry is a relatively new one, and that the developments outlined covered only the immediate future. It is evident from Mr. Turner's speech that the directors are also framing a wise long-term policy to provide the company with unbroken success in the future.

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CARE FOR TILE WORKER.

The Company has undoubtedly taken a predominant part in bringing the asbestos industry to its present excellent position not only in forwarding its development but also in the company's care for its workers. Mr. Turner stated that this policy has been continued during the past year by the estab- lishment of a workers' pension scheme, and the directors have decided to grant in future to the works employees their summer holidays with pay. In addition, ever-increasing attention is being given to improve comfort and hygiene in all new buildings and in the works extensions which are

a. constantly in progress. Improvements of this kind are being

made in support of the excellent relations with its staff which the company has always enjoyed, and one of the chief advo- cates of improving conditions for employees is the Chairman himself.

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SUCCESSFUL LINOLEUM MANUFACTURE.

Sir Michael Nairn, who presided at this week's meeting of Michael Nairn and Greenwich Limited, was in the satis- factory position of meeting shareholders with a favourable forecast fulfilled. He had suggested a continued improve- ment in British trade a year ago, and he now looks for further improvement if industrial peace is maintained and international complications are avoided. From his close contact with the manufacturing subsidiaries of the company, Sir Michael was able to give shareholders a first-hand account of progress in all departments. The board has always made a point of maintaining the factories and organisation in a state of efficiency which enable them to meet all competition, and the company's financial record is evidence of the wisdom of this policy. The company's interests, however, are world-wide, and, like other concerns of similar magnitude, it has had to face considerable dialculties owing to trade embargoes, currency restriction and exchange variations. The Chairman expressed the hope that some of these restrictions may be sensibly relaxed before' long. Mean- while, he informed shareholders that the various unilateral trade agreements negotiated by *the Government have already produced important results on British trading