FINANCE ANt INVESTMENT
By CUSTOS WHILE the war news has not brought any runaway rise in the stock markets, which would be unjustified as well as undesirable; investors have been encouraged sufficiently to let out a little more sail. Kaffirs, particularly the shares of the developing concerns, have remained in the lead ; but this week the running has bees taken up strongly by Rhodesian coppers and a longish list of home industrials. In all this, buying the emphasis has been on post-war prospects, and for the same reason there has been another gentle slide . in long-dated gilt-edged stocks. Home rails have provided another weak spot for no better reason than the official intimation that the war-time grant between the Government and the companies is not to be revised. Any hope in this direction must surely have been very slender indeed, but the market has proved sensitive. Yielding nearly 8 per cent., stocks such as L.M.S. Ordiniry and L.N.E. Second Preference should not be thrown overboard.
CUNARD WHITE STAR Without the Cunard White Star figures, the recently-issued report of the Cunard Steam Ship Co. was Hamlet without the Prince.
Now that the operating company has disclosed its position, the case for the holding company's. equity is considerably reinforced. Cunard White Star, which owns the Queen Mary ' and the ' Queen
Elizabeth,' made rather smaller profits last year, but thanks to its policy of paying off debenture indebtedness, has been able to raise its dividend from 71 to so per cent. At the same time, it 'shows £6,96o,844 in general reserve and contingencies fund, which forms the basis for .a good start in the task of replacing lost ships after the war. As owner of 62 per cent. of Cunard White Star's Lio,000,000 of capital, the Cunard Steam Ship. Co. stands to gain considerably in revenae from the raising of the dividend front 71 to so per cent. Having declared an interim of 21- per cent, for 1943, the Steam Ship Co. should be in a position to supplement this by a final of at least 5 per cent., while a total of so per cent is by no means impossible. Around 22S. 6d. the Ls ordinary shares are an attractive shipping holding. If 7f per cent. is forthcoming the return will be over 6; per cent. On a to per cent. baiis the shares would offer a yield of over 8 per cent.
R. THOMAS RECOVERY It is good to see Richard Thomas Ordinaries, an old favourite of these notes, coming into their own again on the strength of a doubled dividend. Ordinary stockholders are to get so per cent for the year to March 31st, 1943, against 5 per cent. for the pre- ceding year, and although profit figures are not yet available, it is a safe assumption that the rate paid represents a conservative dis- tribution. A step at a time, this company has climbed back to a position of strength after the financial troubles of 1937-38. It is now the possessor of up-to-date plant and can boast of a sound balance-sheet. Just what yield the ordinary shares should offer obviously turns on the view one takes of the post-war prospects At Its. the return on the 6s. 8d. ordinaries in relation to the so per cent. dividend is 6 per cent. That seems to me to do less than justice to the outlook, especially when it is remembered that the dividend is covered by a large margin. Holders should not sell, and despite the recent rise, I would still include these shares amo the more promising lock-up speculative investments.
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