Investment Notes ' It ■ C t .-, T 0 S
THI' wiseacres are shaking their heads at the :traorf.l.nar% bullishness ot the share markets on the eve of the Budget. which is quite unpre,:edented London seems determined to follow the lead of Wall Street regardless of domes;tik politics. Every boom brings in a rash of spkoilalors, who eventually will take a toss, but one must admit that up to the present this has been a fairly seleet.se boom. The Financial Times statistics show that the biggest share advances th:s year have been secured by the most lively sectors ot the economy- plastics by 39.6 per cent., machine tools by 28 per cent.. property by 18.7 per cent.. stores by 17 per cent It is somewhat surprising to see steel. lagging behind with a rise of only 8.7 per cent I recently called attention to sThwAills Ana) 1.1o,.us. now 59s. 3d. cum rights of two-for-nine at 44s. If the dividend is maintained at 15 per cent. the potential yield would be 5.35 per cent. .This is surely preferable to the pitifully low yields now obtainable on many capital goods shares, such as 2.8 per cent. on DAVY-ASHMORE, 2.7 per cent. on wr.I.LmAN OWEN SMITH and 2.4 per cent. on HEAD WRIGHTSON.
Store Shares
After their rise of over 17 per cent. since the beginning of the year, store shares look high. But retail sales remain at a very high level, par- ticularly in clothing and footwear, and Wen the durable goods have shown some recovery. The Yields of most.store shares will probably be Improved by this year's dividends. For example, MONTAGUE BURTON should pay at least 323 per cent., which would put their 10s. 'A' shares at /Is• on a yield basis of just over 44 per cent. GUS is perhaps a doubtful case. It is expected to pay 424 per cent. for the year to March, 1961, against 374 per cent. This would put the 5s. 'A' shares at 55s: on a yield basis of 3.8 per cent., which is none too good. I was glad to see that the TIMES FURNISHING's report bore out my recent aPPraisal of their trading, which has escaped had hire-purchase debts. The dividend was kept at l3i per cent. so that the 5s. shares at I5s. 9d. Yield 4.3 per cent. Next year's dividend can safely be expected to be higher.
Transparent Paper This company manufactures out of wood pulp two transparent papers-diophane and diolan -which are used by the large biscuit and sweet manufacturers for wrapping their merchandise, andby other large retailers for wrapping blankets, nylon stockings, cigarette packets, wool, etc. About 20 per cent. of the company's sales are for export. Its profits in the last two years h. ave been adversely affected by the building of d new factory and the change-over of its machines. Nevertheless, it raised its dividend for 1960 from 174 per cent. to 20 per cent. out of earnings of 431 per cent. and this seems to P°'111 to the confidence of the directors that they will be able to lift profits for 1961. A rights issue 01 one-for-five at 12s. 6d. is being made and if the 20 per cent. dividend is being maintained on the increased capital, the 5s. shares at 26s. 3d. cum rights would yield nearly 4.4 per cent. If this company has really turned the corner its shares should certainly be a 'growth' investment.
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