FINANCE AND INVESTMENT
By CUSTOS
IN the stock markets it is now a tug-of-war between those who are still prepared, at the current level of prices, to look forward optimis- tically into the post-war years and the more cynical investors who have reached the conclusion that early post-war probabilities have already been fully discounted. A week ago it looked as if the cynics were going to call the tune, some selling of home industrial; especially iron and steel and engineering shares, finding jobbers very reluctant buyers and prices correspondingly sensitive. This week, however, the tide has turned and although the volume of business is still restricted by holiday influences, buyers have stepped in and recovery tendencies are at work. - On a long view I feel that the optimists are going to be right There will be transition difficulties which will hit some companies much more than others, but if one is prepared to believe; as I am, that this country will get its fair share in an expanding volume of world trade and that the burden of taxation—both income tax and E.P.T.—will be reduced, there should be scope for a further im- provement from to-day's levels. Weight of money must tend to push prices up and its continued presence is manifest even now in the steady rise In gilt-edged stocks. Discrimination is more necessary than ever, but I am convinced that the basic trend of equity prim is still upward.
A. B. PICTURE PROFITS
Although the Associated British Picture Corporation is merely maintaining its Ordinary distribution at 171 per cent., including a 21 per cent. cash bonus, the full accounts for the year to March 31 disclose a distinctly satisfactory position. Trading profits of the group, struck after providing for E.P.T. and deferred repairs, rose sharply from £1,510,443 to £2,006,460. The increase was due mainly to the acquisition of Union Cinemas and Adelphi Limited, whose profits have been included in the latest figures. Taking the parent company, net profit, after tax, rose from £374,394 to £389,389. Transfer to general reserve has been maintained at Ltoo,000, while the carry-forward is up from £100,340 to £034,528. It would have been easy, in the circumstances, to have raised the Ordinary dividend to 20 per cent., especially as the directors intimate that results of the cinemas for the current year continue to be satisfactory notwithstanding enemy action in Southern England. Moreover, net earnings now have the benefit of the Debenture conversion scheme put through last year. It seems, 'therefore, that the directors are pursuing a conservative dividend policy. Quoted at as. 3d. A.B. Picture 5s. Ordinary shares are yielding just under 5 per cent. At this level they compare favourably with similar equities such at Odeon and Gaumont-British and should be well worth keeping for their post-war possibilities.
UNIT TRUST DEVELOPMENTS
It is all to the good when private enterprise decides to de safeguards for the general public ahead of statutory regulation. development in this direction which should be welcomed by small investor is the formation of a Unit Trust Control Coon by three groups in the unit trust movement. These are Munici and General Securities, Allied Investors and the Orthodox, who ha set up a new council to enforce the spirit as well as the letter the recently announced Board of Trade regulations and who ha also agreed to carry out a supplementary code of conduct. WI this objective in view these three groups have voluntarily agreed submit themselves to a strict code of conduct to be enforced in interests of the investing public by an independent Comptroller a Referee. Messrs. E. D.. Basden and J. C. Burleigh, two known City accountants, have accepted the offices of ComPia and Referee respectively. It is worth noting that the duties of the Comptroller do extend to a regular investigation of unit trust affairs but wt powers are vouchsafed which will enable the Comptroller to p any complaints brought to his notice. It will also be one of functions to. approve all publicity matter. At the moment, the unit trust movement is precluded under the Governmen capital issues control from selling new units to the public, some these self-imposed safeguards may seem of academic import At a later stage, however, when, as seems likely, the movement I. into its stride again, the new code of conduct should prove of gems value to investors. A good example has been set which it may hoped will be followed by those groups which have not yet seen to come into-line. -
Previous page
