Market Notes
By CUSTOS
THE continuing slump in Wall Street and the redundancy notices posted by ICI caused industrial shares in Throgmorton Street to fall to new low levels for the year. ICI is to dismiss 1,050 men out of 9,300 employed in its nylon- fibre factories at Doncaster, Gloucester and Pontypool. The company, the largest industrial organisation in the country, is said to be review- ing its whole capital spending programme in the light of the Government's deflationary policies. BOWATER PAPER and COLVILLES are also dis- missing labour. ICI shares fell to 37s. 3d.—a new low—and now yield 6.6 per cent if the divi- dend is maintained. ALBRIGHT AND WILSON also broke new low records on its bad half-yearly report: these shares now yield 7.1 per cent. The chemical industry is generally the first to reflect an industrial recession. The motor industry is the next and it is significant that output in the three months to July, both in passenger cars and com- mercial vehicles, was down on the preceding three months. BMC shares are friendless at 11s. 21d. (against a high of 14s. 6d.) and would yield 8.9 per cent in the unlikely event of the dividend being unchanged. Store shares have been relatively firm, except for DEBENHAMS, which are down 30 per cent in anticipation of a dividend cut.
The Financial Times industrial index is now back below the 300-mark, for the first time since February 1963—a fall of 20 per cent, as com- pared with a fall of 21 per cent in the Dow Jones index of industrials on Wall Street. Some brokers are talking the Financial Times index down to 270 or 250. Meanwhile, so desperate are some industrial companies for money to finance new developments that BRITISH OXYGEN has had to pay a coupon of 84 per cent on its new Tonnage Debenture stock of 1988. In spite of the com- petition of these high-yielding debenture stocks, the gilt-edged market has remained reasonably firm.
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