FINANCE AND INVESTMENT
By CUSTOS
WHILE there, are no signs just yet of any rush to buy in the st markets, the news from Russia has induced some of the bo investors, with surplus funds to abandon defensive tactics. So these operations have not amounted to very much, measured money ; but since the less enterprising or less liquid investors more reluctant than ever to sell, even a small volume of buy' or inquiry has the effect of raising prices. Leading oil shares, s as Shells, Burmah and Anglo-Iranian, are attracting the long-head speculative investor, despite the fact that the immediate ea and dividend prospects are poor. The same can be said of m Far Eastern securities, like Indian bank *arcs, Calcutta Elec Hongkong and Shanghai Bank, rubber and tin shares' which ha been badly hit in recent months. Nearer home the recov favourites include West End stores issues like John Barker or and John Lewis 7 per cent, preference, catering shares like Sla and I3odega, &c., whose pre-war earnings records justify the assum tion that current quotations show considerable scope for impro ment.
I.C.I. RESERVES
There is something very impressive about the full report Imperial Chemical Industries. Quite apart from the remarka stability of the group's earnings in face of world disturbances, reserve position now commands respect. As Lord McGowan pa out in his detailed survey, total reserves and carry forward amo to £22,500p00, an increase of £r,1o8,000 last year. Moreover, ass consisting of investments, debts and stocks in enemy or enem occupied countries have been reserved against in full. So long E.P.T. remains at zoo per cent., distributable profits cannot rise level at which the board is likely to raise the ordinary divide from 8 per cent. On the other hand, the 8 per cent, looks to to be pretty well assured for the war period unless events take decided turn for the worse. At 33s. 6d. the Li units, yielding ) over 5 per cent., are a good industrial holding.
DUNLOP RUBBER PROFITS
Stockholders in the Dunlop Rubber Co. were well prepared fo cut in dividend, and the announcement of 8 per cent. for 1941, aga to per cent. for 1940, is as good as had been expected. Net pro before tax, of £3,186,269, against n,oca,855, are higher than estimates, but the increase has been absorbed by taxation. Prom under this head, which again includes £65o,000 towards the follow year's liability, was up from £2,391,880 to £2,574,620. Continge reserve receives £100,000, against nil, and there is £632,011 to forward against £622,839 brought in. These results do not bear marks of recent events in the Far East, which have converted profit-making plantations into an enemy-held asset and called severe restrictions on the use of rubber in this country. I sho expect to see 1942 earnings below those of 1941.
TAXES HIT RETAIL GROUP
It is all too evident from Sir Kingsley Wood's unconvincing rep in the Finance Bill debates that political expediency rather financial justice dictated the Government's decision not to make worth-while E.P.T. concessions. It now seems that we must until the war is won before we can expect the obvious injustices the present situation to be removed. Meantime, evidence ac lates of the wholly anomalous results of too per cent. E.P.T. as I now being applied. In the case of the Home and Colonial Stores, the profits actu earned last year rose by £400,080 to £1,259,249, but the tax vision was £389,738 higher at the crushing figure of £984,33°. net result is that ordinary shareholders get no dividend at Trading profits of the Meadow Dairy rose from £280,073 to £416, but as taxation absorbed £322,470, against £173,250, the ord. dividend has been cut from 5 per cent. to 2+ per cent. There also a substantial increase last year in the trading piofits of Lip the gross figure rising from £245,352 to £362,872, but E.P.T. income-tax called for £235,500, against £148,800. The unfair of all this has been skilfully expounded by Sir George Schuste his statement to shareholders and on the floor of the Rolls Commons. The main hope of any early alleviation of the Pos however, seems to lie in the possibility of substituting a fresh E
uf
standard in the case of one or two of the worst-hit companies
group.
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