Market Notes
By C USTOS
THE gilt-edged market, as I write, is recover- ing from its Rhodesian scare. (The five-point jump in Rhodesian stocks—the 41 per cent South Rhodesia 87-92 now being 45—may, of course, turn out to be premature.) The lowering of Bank rate is not at present a market factor, but when it does come it will be a 'bull' point for the discount house shares, not for bank shares. This supports a market contention that discount shares are more attractive on a yield basis of over 5 per cent than bank shares with a yield basis of around 4} per cent. The recent buying of bank shares in anticipation of the banks being forced to disclose their real profits seems to have been misplaced. Under the new Companies Bill the matter of disclosure of bank transfers to inner reserves is to be left to the discretion of the Board of Trade. Disclosure could reveal the fact that in some cases reserves were not as large as some people imagined.
The new account opened with equity shares improving, but I think this improvement is largely technical, the market being extremely short of stock. The rises have been out of all proportion to the (small) volume of buying. For example, a leading broker's circular on television rental shares caused a fairly sharp rise in the leaders. RADIO RENTALS dominate this market and there is no doubt that with its large liquid resources it is in the best position to exploit colour television when it comes. But this is two years or more ahead; meantime even Radio Ren- tals profits can hardly show any startling growth.
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