Investment Notes
By CUSTOS
rrHE Ford pay-off this week—£120 million-- I helped to keep the equity share markets busy, if not buoyant. The relaxation of hire- purchase controls—three years to pay instead of two—seems to have convinced many private in- vestors, who had been accumulating cash, that the worst had now been seen from the Govern- ment, and that if the import bill was really going to come down with an end to stock-building. then the worst had also been seen in the balance of payments. This is bullish guesswork only. However, the talk of a tax concession to the sur- tax payer in April was another reason for the better atmosphere. Finally, the rise in Wall Street and the expectation that the new administration will pull the US out of its recession before the end of the year all helped to encourage the bulls. Already the Financial Times index has recovered 8 per cent. from its December low. Even the gilt- edged market was cheered by the prospect of another cut in Bank rate following on cheaper money in Germany and a lower Treasury bill rate, but advances were mainly confined to the short-dated stocks. The 'longs' will go no better until the fearsome issue of the steel prior charges is out of the way. On the whole I think this bull- ish talk is premature and overdone.
Attractive 'Rights' Shares
A 'rights' issue usually brings down the price of a share and the investor has then a chance to buy the new shares in letter form free of stamp duty on advantageous terms. ICI fell on the rumour of the new issue, but recovered when the issue was announced. The new shares (o¢6 for twenty at 55s.) will be dealt in on Mond4 next. On the forecast dividend of 131 per cent. the old shares at 69s. 6d. return, nearly 4 per cemt. The new shares may present a buying oppac- tunity. METAL BOX new shares have beep a strong market since the start of dealings and the new shares issued at 57s. 6d. are now 19s. premium. On an estimated dividend of 12 per cent. the shares would return a yield of 3,2 per cent. and on this basis are still worth buying. GUEST KEEN fell to 75s. 3d. on the new issue, but have now recovered sharply to 87s. On a yield basis of only 3.4 per cent. the new shares do not compare favourably with steel shares. Another `rights' share which does, however, still appear cheap is ICT (INTERNATIONAL COMPUTERS AND TABULATORS). These fell from 78s. 6d. to 69s. 9dt on the new issue and are now 73s. 6d. to yield 3.3 per cent. on dividends and 9 per cent, on earnings. The company was formed in 1959 by a merger between British Tabulating and Powers-Samas and 40 per cent. of the equity is held by Vickers. It manufactures punch-card systems, computers and other office equipment, and being one of the leaders in the rapidly developing office equipment field it is rightly regarded as an excellent growth share.
Holiday Camps
Next summer can hardly be as bad as the one last year and perhaps on this `bullish' sentiment holiday camp shares have been moving up. Bu-ruNs at I3s. 6d., yielding 4.7 per cent., is nearly double its low of 1960. WARNERS HOLIDAY CAMPS, however, at 6s. 6d. is ls. above its 1960 low and on the indicated dividend of 15+ per cent. yields about 4.7 per cent. But a higher dividend may well be paid next September when , the results for the year to March are announced,
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