FINANCE AND INVESTMENT
By CUSTOS
IT says a good deal for the common sense of the investing public and those whose guidance they seek that markets have been able to take the Beveridge Report in their stride. Desultory attempts to make investors' flesh creep have met with no response. In consequence, the only section of the market which has suffered has been industrial assurance shares. Elsewhere, the restraints on buy- ing which have been so much in evidence in recent weeks have now been reinforced by seasonal influences. It is a striking testimony to the underlying technical strength of markets thal prices hold firm. Well in advance of the dividend dates speculative buyers are nibbling at home rail stocks, especially L.N.E. Second Preference, around 30, and some of the Ordinary stocks. While ii would obviously be foolish, in view of the terms of the rental agreement with the Government, to budget for any substantial increases in dividends, I shall not be surprised if the rail directorate! decide to distribute net revenues up to the hilt. That implies a possibility of slightly higher distributions on such stocks as L.N.E. Second Preference and L.M.S. and Great Western Ordinaries. As yields, even on the 1941 rates of dividend, are still very generous, the upward movement in the market may well continue.
COPPEk DIVIDEND POLICY
Shareholders in the Rhodesian copper group may be forgiven if
they are unable to make head or tail of some of the dividends just declared. While Mufulira returns to the dividend list with Id per cent., the Rhokana Corporation cuts its payment from 30 per cent. to 15 per cent. From the full accounts it seems that increased costs were mainly responsible for a fall in operating profits from £2,172,198 to £1,791,125, but the drastically reduced dividend was due also to the board's decision to put £400,000 to general reserve. Clearly, the Rhodesian copper producers are not happily placed in relation either to taxation or costs, but if I held Rhokana shares I should be reluctant to sell. On the 15 per cent, dividend the yield at £6-1 is only just over 2 per cent., but the recovery potentialities are correspondingly great.
BARCLAYS (D. C. AND 0.) PROGRESS
It is clear from the full accounts for the year to September 30th
of Barclays Bank (Dominion Colonial and Overseas) that in face of war handicaps earning power has been well maintained. Net profits, struck after providing for taxation, have risen from £399,685 to £419,611, which covers the 61- per cent, dividend on the "A" and "B" shares by a substantial margin. As a year ago, L200,000 has gone to reserve fund, which ha3 been further strengthened by anothrr transfer of £300,000 from contingency account. Like the home banks, this institution has found itself compelled to apply the bulk of a substantial addition to its resources in gilt-edged securities. The balance-sheet position is immensely strong from the standpoint of liquidity. Cash and money at call amount together to 331 per cent, of deposit liabilities.
Previous page
