Burmah Oil
Last of the oil leaders, BURMAH OIL, has stated that it will pay not more than Is. 10d. gross for its final, making 2s. _1144. gross for the year. This is equivalent to 19.1 per cent gross if the 6d. capital distribution (4.26 per cent gross) is included. The year 1966 is a transitional one and the amount distributable will probably be rather less—around 18 per cent. The full effect of corporation tax will not be seen until 1967, but the market is estimating that the company should be able to distribute about 19 per cent gross, which would allow a yield of 6.35 per cent at the current price of 60s. I cannot see that at this level the shares are particularly attractive. The company is issuing £15 million of 71 per cent preference stock in order to take up its rights to the BP issue. This is sen- sible enough, as the new BP shares at the issue price of 50s. yield just under 8 per cent. I do not anticipate these preference shares will go to a premium. Like the ordinary share, they should be left largely to the professionals.
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