Market notes
CUSTOS
The new account opened on the Stock Ex- change with a firm tone in the gilt-edged market and a slightly better feeling in the equity share markets. The latter was due, no doubt, to the crushing defeat of Labour in the local elec- tions. Would this not encourage the Govern- ment to reflate the economy a little more and a little earlier? Mr Callaghan, of course, said no in the debate, but who in the City believes in the protestations of politicians? Sir Halford Reddish gave the lead to the market by raising the dividend on RUGBY PORTLAND CEMENT from 111 per cent to 12 per cent and distributing a one-for-five bonus. He declared that this com- plied with the Government request for 'moderation.' As Rugby Portland Cement's profits have been rising for the past twenty years, Sir Halford is probably justified in say- ing 'boo' to Mr Michael Stewart. WHITBREAD has also shown moderation in giving a one- for-two scrip issue to bring its equity capital more into line with the real capital employed. This company has recently taken over THREL- FAII-S CHESTER; these shareholders will not participate in this capitalisation issue.
A feature of the Market has been the turn- round in property shares. Apparently a demand sprang up which caught the jobbers short of supply. Property companies, in spite of cor- poration tax, can still offer their shareholders some hedge against inflation by the increase
in rentals which always follows on reversions. A curious feature was the recovery in GALLAHER, whose earnings had been knocked (by 25 per cent) by competition from IMPERIAL TOBACCO. It was felt that a yield of over 8 per cent on the reduced dividend was treating Gallaher shares too harshly. But buyers still came forward for Imperial, now yielding 6.2 per cent at 69s.
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