FINANCE AND INVESTMENT
By CUSTOS
THOSE who expected that the surmounting of the Budget hurdle would enable markets to develop a stronger stride have so far been disappointed. At the moment there is little evidence of any great weight of money awaiting investment, and most brokers will admit some disappointment at the volume of business and inquiry. For this condition of things there are several reasons. One is the fairly general view that most prices are high enough. Long-dated gilt-edged, for example, are looked upon as pretty fully valued to yield just over 34- per cent. gross or II per cent, net. So, too, are the general run of leading industrial ordinary shares yielding any- thing between 4 and 44 per cent. Another restraining influence is the feeling that the opening of a' Second Front is not far ahead, and that, when it does happen there will be a period of hesitancy in markets. I am not surprised, in these circumstances, that business hi Throgmorton Street is quiet. It is likelipo remain so. At the same time, I feel that the process of adjustment between various groups, e.g., between industrials and home rails, will be continued, and that selective buying will bring substantial rises wherever there are special facts to warrant it. Home rail junior stocks, such as L.M.S. ordinary and L.N.E. second preference, are still under valued, and the demand for low-priced recovery shares will go on.
E.F.T. CONCESSIONS
There are no surprises, either pleasant or otherwise, in this year Finance Bill. As one suspected, the E.P.T. concessions to wastin asset concerns mentioned by Sir Kingsley Wood in his Budg speech are of a minor character not likely to cause much exci ment among investors. It is now cleir from Section 21 of th Bill that the official aim is to improve the position of concern which by " selective mining " have been raising their output at the owir expense. Some of the Nigerian tin mining companies co within this category, but I cannot see how Rhodesian coppe producers stand to gain. Another interesting fact which emerge from Section 20 is that the concessions granted under Section 31 of the Finance Act of 1941 are to be extended to asbestos under takings. The name of Turner and Newall immediately comes mind, but I shall hesitate to buy the company's ordinary shar on the strength of this concession. Larger considerations enter the recovery prospects being already allowed for rather liberal. in the current price.
A SHARE FOR RECOVERY As the months go by, and more and more companies succ in finding reasonably profitable employment in war conditions, th list of preference shares carrying arrears of dividend gets shorter _Among the laggards are Oswald Tillotson 7 per cent. cumulativ £i preferences, which have not paid any dividends since Novembe 1933. Accumulated arrears now amount, therefore, to nearly 70 cent. gross, or the equivalent of nearly 7s. a share net. This ro transport concern has had an unsuccessful career, but with on1 Lroo,000 of its L313A44 of issued capital' in the form of preferen I cannot imagine that there is not scope for a substantial recov from today's price of ros. Profits for r941 more than covered t full 7 per cent. preference dividend, and the debit balance earn forward is more than covered by the ordinary capital. The 19 accounts are due next month and should show some further provement, reflecting the benefit of Government contracts.,
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