CABLE AND WIRELESS PROSPECTS The fall from 85 to 68
in the new ordinary stock of the Cable and Wireless combine is a dismaying movement. Traffics have contracted slightly in recent months, because international trade has slowed up _partly on account of the setback in com- modity prices and partly on account of European political developments. In spite of these factors, however, the monthly traffic figures have been consistently above those of a year ago, the average for the first nine months of 1937 being i i per cent. higher than for the corresponding period of 1936. Allowing for the effect of operating economies, I estimate that the net revenue this year will show a considerable expansion.
In framing their reconstruction scheme earlier in the year, when the capital was drastically scaled down, the directors estimated a 4 per cent. dividend on the new ordinary stock. Difficult times have followed this official forecast, but I do not see any reason for fearing that it will not be fulfilled. At £68 per Do° nominal, the stock is now on an attractive basis, offering -a yield of-roughly 6 per cent. as well as a prospect of appreciation if and when international trade should revive. It is also possible that one day the combine will be able to come to some arrangement with the Government concerning the maintenance of unprofitable routes which are nevertheless of strategic importance for purposes of Imperial Defence.
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