FINANCE AND INVESTMENT h(
By CUSTOS
WINGS For Victory Week in the City, was bound to intensify th stagnation which already enveloped the stock markets, and turnove has suffered a further decline. Once these special counter-attraction are over, markets should get the benefit of a good deal of moue) seeking higher yields than those offered on the Government's tap loans, but I doubt whether we shall see any real activity until th Budget is out of the way. On the other hand, there is plenty evidence to support the view that even if markets remain quiet, th price structure will hold firm.
RAIL. RENTAL CRITICISED
It is not at all surprising that railway stockholders should fe compelled to register their dissatisfaction with the fixed renta agreement with the Government. While it is true that last year dividends were in most cases higher than the 5941 rates, it I equally true that the Treasury has netted a profit which was probabl not far short of £5o,000,000. At the L.M.S. meeting, Sir Thoma Royden was outspoken in his defence of the railway position, bu many stockholders must be asking themselves whether this sho of independence and courage has not been made rather late in th
y. There can be little likelihood now of the terms of the fixed ental being amended. The pity is that the railway companies were anoeuvred into acceptance of such terms in the negotiations which 00k place last year. As things stand, L.M.S. stockholders have ;e very reason for assuming that the 1942 rate of 21- per cent. on the rdinary stock will be maintained during the period of the existing greement despite their chairman's statement that he could offer no arantee.
COURTAULDS' GILT EDGED
4 There is nothing in the 194:: accounts of Courtaulds to alter my pinion that the £i ordinary units are a promising long-term invest- ent. The yield, at 47s., is admittedly very small on the basis the 71 per cent, dividend, but the balance-sheet position is so trong and the possibilities of the industry so great that I, for one, vould not mind holding Courtaulds' ordinaries for their post-war rospects. A glance at the latest balance-sheet shows that the gilt- dged holding now amounts to over £40,000,000, a reflection of
e investment of the £27,000,000 odd received from last year's ale of the American Viscose assets. In addition there is £2,000,000 Tax Reserve Certificates and £1,320,340 in cal, altogether a huge ghting fund available for post-war developments.
INVERESK POSITION Installation and adaptation of machinery to deal with home-grown aterials have enabled the Inveresk Paper group to increase their s profits from £622,079 to £812,335. Taxation called for 426,516, against £291,827, but it has still been possible to resume rdinary dividends with 6 per cent. In the full accounts the irectors remind the holders of the 6 per cent, debenture stock f the company's right to redeem at 103 on giving six months' notice. ere can be little doubt that after August rst, which is the last te on which the stock can be converted, at par, into ordinary ares, this repayment option will be exercised. The chances are, erefore, that from now on the debenture stock outstanding, which ounts to £378,00o, will tend to get into the hands of those intend-
g to convert. At today's price of £123 the debenture is the eapest method of buying the ordinary shares, the equivalent price r the is. ordinaries being about Is. 3d. against the market quotation 3•IS. 51d. I regard the long-term possibilities of this group as eing distinctly promising.
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