Market report
CUSTOS
The Stock Market, which takes its encourage- ment where it can find it, cheered up after the weekend on the better news from France and on the Financial Times's monthly survey of business opinion. This showed that hopes were rising both for exports and for profits. Expec- tations of capital investment continue to rise, and the reductions in stocks, enforced by scarce and dear money, may now be dying out. All this was well received—though it is surely not much more than the market has been dis- counting for months. The Fr index, which had drifted below 450 just before the holiday, took a turn for the better. ft still seems that 450 is a sensitive level for this market, and that if it is broken in the index could lose another thirty points quickly.
The steady flow of rights issues continues, the newest being from Handley Page. This com- pany bravely refused to take part in the air- craft mergers of eight years ago, although threatened with the loss of government con- tracts—a threat that has been enforced. But its Jetstream trainer aircraft, which it has sold to the United States Defence Department, gives it orders for some years ahead. Hence the need for additional finance. A few months ago it seemed likely tfiat one of the giants would take Handley Page over for its order book, and this could still happen. But the obvious danger is that Handley Page' might find itself without a good successor when the Jetstream orders are completed, and still in the British government's bad graces. This must be rated a speculative stock.
The C. T. Bowring group of insurance, ship- ping and trading companies owes part of its increase in pre-tax profits—from £2,369,000 to £3,358,000—to the devaluation of sterling, and the consequently enhanced value of the group's overseas earnings. Tax, at £325,000 (little more than hilf last year's figure) is re- duced by the more favourable treatment now given to the shipping industry. The results of English and American Insurance, in which C. 1' Bowring holds a 94 per cent interest, are , - not consolidated; Mr Ian Skimming, group chairman, calls them 'extremely bad': a pay- ment of £250,000 has been made to eliminate the debit balance on the profit and loss account. Unprofitable business is being weeded out as fast as possible.
Previous page
