FINANCE AND INVESTMENT
By CUSTOS
MARKETS are so suspiciously good that one wonders how long we have yet to wait for the first instalment of the coming war loan programme. Many are arguing that so long as prices are rising the Treasury has everything to gain by waiting, but this reasoning is surely rather ingenuous. In distinctly favourable market conditions, which obviously owe a great deal to the slowness of the war in starting up, the authorities have played a strong hand skilfully. Two recent manoeuvres—the 41 per cent. Conversion loan operation and the dollar security requisitioning—have been neatly dovetailed into plans for helping gilt edged on to a higher plane, with the result that Defence 3 per cent. 1954- 58, to take a medium-dated stock, are now comfortably over par. Is it reasonable to expect Whitehall to hold back much longer before cashing in, on however modest a scale, on this situation?
Meantime, there is a healthy broadening of interest in the stock markets, which at once testifies to the re-awakening of speculative investment and makes for freer dealings and closer quotations in many of the out-of-the-way shares. Front-rank industrial ordinaries were bound to get the benefit of an overflow of demand from prior charge stocks and the extent of the recovery is mirrored quite strikingly in the improvement in the prices of many of the unit trusts. Latterly there has been a modest increase in purchases of unit trust investments which offer decidedly attractive yields as well as scope for capital appreciation. Results such as those of Courtaulds, which show a rise in profits from £352,265 to £2,581,255, underline the recovery potentiali- ties of many leading British industrials. Further afield we have encouraging indications from companies like Canadian Pacific of the quickening pace of economic activity in the primary_producing countries. C.P.R. preference has rallied sharply from 35 to 42 in the past ten days, but is worth holding. As a lock-up speculation the common shares have chances at 7i dollars.
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