* * * * UNION-CASTLE PROSPECTS Two or three months
ago that would have been regarded as an absurdly low valuation for Union-Castle ordinary shares, even allowing for the fact that no dividend has been paid on them for many years. The company is strongly financed and has staged a sharp recovery since the slump period. Even last year earnings on the ordinary capital, after deducting preference dividend, were over 14 per cent., and it is a safe assumption that this year preference payments will be brought up to date and ordinary share earnings will show a further substantial improvement. In present market conditions it is difficult to forecast the price at which the shares will be quoted when dealings begin on the Stock Exchange, but the atmosphere would have to be one of inspissated gloom to bring about a quotation of anything approaching Lx. What other share in a shipping company of such reputation as the Union-Castle can be bought to give an earnings yield of over x4 per cent. ?
I cannot think of any.