Market notes
CUSTOS
There has been a fair recovery in the gilt- edged market, perhaps on 'bear' covering, for investors had become unduly pessimistic. It is thought that the recovery may be carried further when the steel shares go ex dividend next Monday. Buyers may then be tempted into the market if discounts are widespread. There was also some' recovery in the short-dated bonds when Conversion 6 per cent 1972 were dealt in ex interest for the first time. At 98-& minus thirty-three days' interest this stock is at- tractive, being in a 'tax free' zone from 971.
Equity shares were also looking better with oil shares sharply up on another 'bear' squeeze. No one, of course, knows how badly BP profits will be affected by the expensive chartering it has had to do, but most investors are still inclined to switch from BP to Shell. Stores shares were greatly helped by the excellent GUS report. It says much for management skill that GUS has been able not only to take care of SET but to advance profits in a dull trading period. With the restored rise in divi- dend to 36} per cent Gus 'A' at 49s yields 3.7 per cent. With a price-earnings ratio of 154- per cent the shares cannot be called dear.
Share prices of the hire-purchase finance group have risen strongly this year in antici- pation of improved profitability (expenses down and turnover up), but yields of 4.5 per cent on UDT and 4.7 per cent on Mercantile Credit seem to be over-discounting their im- proved prospects.
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