Market report
CUSTOS
The market is still as buoyant as ever. Having reached a new record level, at 464 on the Financial Times index, at the end of last week, it came back sharply on Monday. The index fell by 13 points. Mr McChesney Martin's jeremiad was chiefly responsible, but in any case a correction was overdue. More remark- able was the market's performance of the two days that followed: almost all the loss was re- gained. U Thant's expressed 'high hopes' that discussions between the us and North Vietna- mese governments would start soon put the market six points higher in an hour or so. In- vestors are showing a striking capacity for making bricks without straw.
It is now five months since the devaluation of sterling, and the professionals who at once bought government stock on exceptionally high yield bases still have nothing to show for it. Mr Martin's words and actions--the us Federal rediscotint rate, equivalent to Bank rate, rose to 51 per cent at the end of last week—set the gilt-edged market back. The long-expected fall in interest rates seems no nearer than ever. Among the Corporation stocks some striking redemption yields can be found: f8 is per cent on Belfast 6 per cent 1973-75, and slightly more —£8 is 6d—on the lower-coupon Liverpool 41 per cent 1970-74.
Company notes
Sir Maurice Bridgeman, chairman of British Petroleum, reports on a year of exceptional difficulty: BP, with a high proportion of its re- serves east of Suez, and its important stake in Nigeria. was hard hit by wars. These disadvan- tages will be partly offset as larger tankers come into service. The company, says Sir Maurice, contributes some £100 million a year, net, to the tnc balance of payments.
Lord Craigton's first report from the chair of United Biscuits looks at the early stages of the group's reorganisation, from four operating companies into one. New factory investment, an attack on the cake market, and the purchase of Meredith and Drew has absorbed last year's cash balance. Lord Craigton foreshadows an issue of loan stock. 'Substantial forward pur- chases' of raw materials in advance of the de- valuation of sterling mean that its impact will not be fully felt until the end of'this year. The accounts of Brown Bayley now include those of Brown Bayley Steels and Hoffman Manufacturing. The sharp fall in group profits after tax, down 40 per cent at £458,903, is largely attributable to Hoffman. Here stocks and ranges are being reduced, but Mr I. W. Garton makes no forecast of what Hoffman can achieve this year.
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