Discount Shares
There is, in fact, a case for switching, selec- tively, from bank shares to the discount houses. The booming bank profits have been due a) the excessively high interest rates charged to bor- rowers. This year interest rates will be at a lower average and the restraint put on the growth of advances (maximum 5 per cent), coupled with the rise in bank salaries and operating costs, will certainly slow down the growth of bank profits. On the other hand, the discount houses have been working on a much more favourable margin of profit and no longer have to fear, we hope, any upward move in Bank rate. The recent rise in the 'shorts' improves their port- folio position. The yields range from 4.2 per cent on ALLEN HARVEY ROSS to 6 per cent on CLIVE and 6.1 per cent on NATIONAL DISCOUNT, which has just maintained its dividend on the 'W shares.
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