E.D. AND UN ION-CASTLE - Quoted in their new form E.D.
Realisation shares are already worth a few shillings more than the 38s. at which I suggested they were cheap a week ago. Holders have received 5s. in cash, an allotment of one and three-tenths Union-Castle ordinaries, now standing at 22S. 9d. each, while the remnant E.D. shares are 9s. 6d. The whole bag is therefore worth roughly 44s. 3d. Is there still any attraction in buying E.D. remnants at 9s. 6d. or Union-Castle ordinaries around 22S. 9d. each ? I think the answer is yes in both cases. As .there is £i,000,00p of E.D. Realisation ordinary capital in issue, all in Li shares, the current price of 9s. 6d. implies a valuation of just under k5oo,00ci for the • remaining assets still to be realised. Some of the assets may not be disposed of quickly, but the total finally netted should not be less than L600,000, or the equivalent of I25. per share. Here, then, is a tax-saving purchase for the super-tax payer. , Union-Castle kr ordinaries, at 22S. 9d., look under-priced by comparison with other shipping equities. The company, it is true, is improving its fleet, which implies ,a conservative dividend policy, but last year's- earnings on the ordinary capital were over 14 per cent. Without committing myself to any forecast of a dividend for 1937, I think the shares have scope for considerable improvement given a reasonably
favourable trading environment
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