Investment Notes
° ri,r7ket go higher, partly because it seems to e , *S.'; made up its mind that a Common Market j r$I.Inent is in eight, partly because it feels ;. 'nal as the Government wants to see a re- :5 2;x1)ansion of the economy it Will take action j ' 'de°rt-term and for long-term borrowing. A re- j 14,,QL,U113n in Bank rate will make equity shares ' 'IC' all the more reasonable on a yield basis. cl 1,e all is IVY disappear; that is, the average yield on . e be Oet than the yield on old Consols. It may ie „f 11.al lime 25, when the Financial Times index a ii` llq•industrial share index may then be slightly , n may be to make money cheaper both for 1 30,mlustrial shares touched 252.8—a level i'lk rally in equity shares has gathered lake4- If my colleague is right, the first action ruSt and the shortage of stock on jobbers buying of the newly formed Equity Income, Momentum. There is a technical reason-- but I would not be surprised to see the By CUSTOS gap at that moment will prob- c'ellt. below its high of 365 in April, 1961 ' 1, e'la turn out to have been the bottom of this r" i'artictllar bear market. As the official statistics, 0. erANhich I referred last week, point to a flatten- Dink, ,. t• of the doss curve in company 1 inrit' this would not be unreasonable, but 1 I Ict befr."`; PrnPhasise the fact that this is not the ning of another boom. There are too many ae ti.e.rlainties ahead- Wail Street, general elee- :e:.1e. ! tc.--to allow that to happen. But the in- P Lan start picking up the shares of corn- (mentioned last week) which can now lorward to slightly better profits. , dged Market 'ler° is still a Government 'tap' in Funding ., tentPer cent., 1981-84, and in Treasury 5 per '. e ni.:' 1986-89, not to mention the Conversion ece-, le' cent., 1971. 1 prefer Treasury 5 per cent., ' i Ile,"''.ill go es dividend on September 10. At Present price of 871 cum dividend the yields - ted,„„5.85, Per cent. flat, 6.1 per cent. to gross, I r uPtIon and 6.35 per cent. to 'true gross ted1 . Ilee,11,11 ,P11°h. War Loan at 58 yields 6.1 per cent. lime" 10kis only some eight points above its all- ,. tveree'w and if the long-term rate of interest ;,1;nse,,,•1'3 fall to, say, Si, per cent., the potential ,f leiniT War Loan (ex dividend) is just over six 4inf,.—fir 11 per cent. A 5 per cent. rate would aprt,,,a Price of 70 or more. So there is sonic ark- Profit to he had out of the gilt-edged et as well as a high income.
.,. 7:1.aterial Shares
coiil,l-he road-material shares, the ANIITY GROUP ...,'iel&" °tit well in both earnings and dividend e.lasi '•„'",-rl'ese shares were made public in July tssear (at 11s. 4ed. per share) and a rights one.. k--- foi-three- has recently been made to neie !: llietila expansion of the company; in par- C r'' tIC aequistion of the Cowley Concrete :- te4-'erpartY and the extension of its pre-mixed „ ternectete activities. The group is primarily con- ii led iii,'Whh the extraction of sand. gravel, stone /-01C,It'lle and the hiring out of contractors, 16; ' 1-Ise in roadmaking. At the present Ps .ce IIter e''' 6d, (new 16s. 9eL) the shares Yield 4-7 t t cent on dividends and 14.6 per cent. on
earnings. Incidentally, the group owns the free- hold of 2,248 acres of mineral land mainly in Oxfordshire and Berkshire, and the last net asset value of the shares was about 12s. 6c1.
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