Market Notes
By CUSTOS
THE gilt-edged market soon recovered from the setback caused by the £60 million twin- issue GLC stock by tender-£20 million at 6+ per cent dated 1977 and 140 million at 6+ per cent dated 1990-92. As the redemption yields at the minimum tender prices-£6 19s. 2d. for the shorter-dated and £6 17s. Id. for the longer- dated-compare well with government bond yields, the GLC issues should go well. But government long-dated stocks are likely to be less buoyant while these issues are being ab- sorbed.
The equity share markets remain very quiet except for highly selective long-term investment buying and short-term speculation in takeover issues. A Bank rate reduction when it comes will probably bring more interest in the hire- purchase finance companies, particularly MER- CANTILE CREDIT and Burma WAGON, yielding at present 5.6 per cent and 5.4 per cent respectively. There has been some recovery in ANGLO AUTO -now 2s. 3d. after a low of Is. 444.-on news that the HODGE GROUP is considering a recon- struction which will cut down the pyramid structure of the group. Anglo Auto has turned a loss for the first six months into a small profit for the full year after a severe writing-down of doubtful debts. The dividend is cut to 2+ per cent for the year against 25 per cent for 1965. There are signs of a recovery in the motor-car trade, but precious little yet in the hire-purchase busi- ness. Following the Government's approval to an easing-up of the credit squeeze on private house-builders and house-purchasers, there has been a slight revival of interest in building shares, but the disappointing results of LONDON BRICK, whose dividend has been cut by 2 per cent to 18 per cent, has been a damper in this market. At 17s. 3d., London Brick shares are now on a 5.2 per cent dividend yield, and there is a growing belief that in the next eighteen months the dividend will be restored to 20 per cent.
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