I NVESTMENT NOTES
By CUSTOS
ABETTER tone developed in the equity markets this week on the recovery in Wall Street. but the volume of trading is still small and the market scnsitive to bad news from outside. The next due will be decided by the important dividends —tie to be announced shortly--in particular.
date at the end of this week. The dividend v?te for IMPERIAL CIIEMICAL INDUSTRIES IS late :,"arCh and at the moment the shares are a very fir,n1 market in the anticipation that the report 111 reveal a high rate of earnings and an I8nerease in the dividend from the equivalent Per cent. to 10 per cent. or even 12 per cent. ".the bulls are right and 12 per cent, is paid there WIll be a scramble for the shares, for at 60s. they :1'°old be on a 4 per cent. yield basis. I anticipate elnh that event a general switching from other ell'ioal shares now offering very low yields into ICI In their recent report on chemical fertilisers 3 ttLne Monopolies Commission criticised FISONS as Major supplier of stiperphosphates and corn- jo7u,,nds, remarking that the company's practice tog prices at a level which produces profits Of " is °ver 20 per cent. on capital employed operated a t!4„inst the public interest. Fisons' shares came Do', oil this report, but Sir Clavering Fison has cm-Poohed the report in a press interview, saying that it Was based on prices which ruled two years ago and have long since been changed. Somewhat imprudently as an industrial leader who should not be concerned with the stock markets, he is reported as saying in the Evening Standard of February 22: 'Our shares will more than double in value in the nineteen-sixties.' Mr. Cobbold. you have been warned.
Two High Industrial Yields •
A good progress report comes from w. H. DORMAN, the Stafford manufacturers of diesel engines, •Flexster flexible piping, and hydraulic clutches. This company suffered badly from the 1957-58 recession, but made some recovery in the year to March, 1959. For the current year the directors estimate profits nearly treble those of 1958-59 and nearly equal to the record profits of 1956-57. The interim dividend of 81 per cent. indicates a total return of not less than 16+ per cent, which would give a return of 5.7 per cent. on the. 2s. 'A' shares at 5s. 101d. The company makes a wide range of diesel engines, including diesel-electric engines for the railways, and has subsidiary companies in Canada and Australia. Sales abroad account for over 80 per cent, of their total engine sales and with a lengthening order book and factories working to full capacity, profit margins should have improved considerably. CUTER MILLS PAPER, which makes high-quality writing, commercial and art papers, is one of the few paper companies which increased its trading profits in 1958 as well as 1959. The dividend has been raised from 35 per cent. to 50 per cent., and at 52s. the 5s. shares yield just under 5 per cent. When the full report is published the market should go higher.
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