Investment Notes
By CUSTOS
?uponinvestment White Paper had little effect I upon the equity markets, which had already discounted its basic innovations. There had already been a sizeable fall in shares such as RADIO RENTALS, which are the victims of the new government discrimination. But more falls are certain to come in the shares of those com- panies whose dividends had been bolstered up by the investment allowances and will now be un- covered. The setback to THORN ELECTRICAL—the `blue chip' of the exclusive 'growth' club—con- trived to halt the advance in low-yielding 'growth' shares. The market had been over-optimistic about Thorn's half-year. Heavier depreciation and interest charges brought the profits before tax down by about 181 per cent. The market ex- pects the second half to be better and is looking for earnings of around 85 per cent to cover the dividend of 30 per cent. The 'A' shares have come down from 65s. 9d. to their present level of 53s. 9d., but a yield of 2.8 per cent is hardly good enough for the present time when manufacturing profits are being squeezed. What is the point of buying growth equities today when growth has been killed by government order? The cautious investor is now looking for equities outside the vulnerable manufacturing groups.
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