IT is quite a long time since foreign politics has affected the London stock markets but the uncertainty as to whether the war in Indo-China would spread was the signal for a wave of profit-taking which particularly affected the undated Government stocks. Even so, the index of industrial equity shares has not fallen yet by more than 2 per cent. Disappointment that the SHELL did not increase their final dividend—though I never expected it—made the fall in oil shares sharper than the average. It provided another opportunity of acquiring an out- standing investment on very reasonable terms. ULTRAMAR, which had become a very active market, came back 2s. to 29s. 3d. This company's loan stock is now being fairly quickly repaid, the amount outstanding is now about £2,900,000. As existing pro- duction is sufficient to take care of the repayment of the remaining debt any fresh discoveries in the oil fields will go to the shareholders' benefit and be discounted in the price of the shares. Hence the specula- tive attraction of Ultramar shares. But it is not my business to recommend specula- tion. Investors will have plenty of oppor- tunity in this quiet, reactionary period to acquire good investment holdings—provided, of course, that Bank rate is not lowered.
IT seems that I have received a tip from my colleague to look into the Scottish invest- ment trusts. I do not ordinarily recommend these stocks because they are generally heavy in weight and difficult to buy. In fact, the intending buyer often has to take not what he wants but what the jobber happens to be offering. And, of course, in bad times they become as unsaleable as tea shares. The prospect at the moment is quite promising but those stocks which have not yet had their final dividend are yielding only about 44 per cent. because the market is expecting an increase in the rate and 5 per cent. in Canada. The break-up of its investments was last reported at 256. This is typical of the market, for it is now rare to find a good trust selling below break- up value before its current year's accounts are published.
LOOKING again through the Scottish list I have found one trust which is offering a good yield and selling at a discount. This is SECOND EDINBURGH AND DUNDEE which at 390 is yielding 54 per cent. on dividends of 20 per cent. out of earnings of 31 per cent. Its accounting year ended on January 31st and its break-up value was then 4531. It was holding 36 per cent. of its portfolio in American securities. These are heavy stocks and to give the investor a "lighter" choice I would mention SECOND scorrisu INVEST- MENT 5s. units at 31s. to yield £4 8s. on dividends of 274 per cent. out of earnings of 454 per cent. This trust's accounts run to October 5th and its final dividend will be declared in November. This may be raised above the previous rate of 174 per cent. Its break-up value was last reported at 31s. 4d. and 36 per cent. of its portfolio was invested in the United States.,