Investment Notes
By CUSTOS
rr HE gilt-edged market seems to have been I unduly pleased with the Treasury announce- ment that the UK had agreed with the US Federal Reserve on the provision of a reciprocal swap facility of $500 million (against $50 million pre- viously). The statement added that the main- tenance of the international payments system depended on the stability of the two major reserve currencies and everyone knows that the US authorities have been making these reciprocal swap currency arrangements because of the con- tinued loss of gold from Fort Knox and the increasing suspicion in which the dollar is held. However, the firmness of sterling and of the gilt- edged market helps the Treasury policy which is to ease the long-term rate of interest—now down to 51 per cent at the present price of `Daltons.' The equity share markets have derived some encouragement from the new housing drive and from the provision of £30 million of `cheap' money to shipowners to help finance orders placed with British shipyards. Some com- pany reports—notably the interim statement from TURNER AND NEWELL—point to the im- provement in home trade and profit margins which is the basis of the present 'bull' movement in equities.
Motor Components
A bad report is expected from WILMOT- BREEDEN for the year ending December. The 5s. Ordinary shares have fallen from 14s. to 10s. 71d. and the 20 per cent Convertible Preference to 14s. 6d. A good report, however, is expected flora BIRFIELD. This company is the main tTiandae; turer of prOpeller shafts (holding 75 per cent ei the domestic market and nearly 100 per cent of the export market), of constant-veloc0 joints for front-wheel drives, of power take-olf shafts for agricultural vehicles and of over drives for passenger cars. Over half its output goes to the motor industry and one-quarter 10 agricultural and general engineering; 50 per eeI/I of its output is exported and it has subsidiarie5 in America, the EEC and EFTA. Its profits fog the half-year were 15 per cent up and for th, full year should show the good effects of 1'he; motor-car boom. The 5s, shares at 18s. (agars'; a low this year of 15s. 6d.) yield 2+ per eeil` on dividends and over 9 per cent on last cafe; ings. On current profits the earnings yield Os be over 15 per cent.
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