Venturers' Corner
Selling by old holders of the R.M. and E.D. Realisation shares, who have received a substantial pro rata allotment of Union-Castle Steamship £t ordinary, is doubtless responsible for the slither from 22S. 9d. to 21S. in the Union-Castle shares since they were quoted on the Stock Exchange three weeks ago. The buying, I should say, is better than the selling and the shares are steadily passing into strong hands. No dividend has been paid on the shares for many years and possibly only a small payment will be made in respect of 1937, even though the preference arrears have already been eliminated. But last year's earnings were equivalent to over ro per cent. on the ordinary shares and rather more than that should have been earned this year. On the assets side, it is worth remembering that the Union-Castle company is carrying out a very thorough- going modernisation programme, as a result of which it will become possessed, within the next few years, of an excellent up-to-date fleet, conservatively valued in the books and well equipped to share in the trade prosperity of South Africa.
From the standpoint of income, the handicap, as I have said, is the heavy capital outlays necessitated by the fleet programme, which will make it desirable to conserve cash resources, but the earning power is certainly there assuming that general travelling conditions remain favourable. At 21S. Union-Castle ordinary shares should turn out a useful lock-up speculative
purchase for a gradual improvement in ,rice. ' 'CusTos.
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