Investment Notes
By CUSTOS
THE equity markets were ready for a turn- down before the shadow of a general elec- tion fell. Wall Street had become bearish and the profitless prosperity which has begun to mark company reports from British industry—witness ICI, ENGLISH ELECTRIC, AEI, RANSOME AND MARLES, etc.—brought home to the investing public that ninny industrial equities were rather too high. Of course, this will not prevent the unit trusts and the new investment trusts from buying when their cash pours in. The latest to raise funds by public issue is the new Throgmorton Trust, which is issuing a 7 per cent convertible loan stock, together with income shares and capital shares. This fashionable 'triple' craze looks like being overdone. (I much prefer the new Trafalgar House property-investment com- bination of 'B' ordinary shares and 7 per, cent debenture stock, which can be bought at 23s. on a current yield basis of 6.6 per cent, rising to 7.65 per cent in 1967-68). The spurt in steel shares on the election news is difficult to com- prehend. If Labour is returned with a bigger majority, the first Bill they will pass is steel nationalisation, with lower takeover prices than those originally offered. The new Parliament will not be bound by what the old offered. It is possible that a new form of rationalisation rather than all-round nationalisation will be put forward.
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