Company Notes
By CUSTOS
THE publication of an encouraging new Economic Survey and the strength of special features (like the irrepressible Glossies) caused the industrial share markets to open the new account, which will cover the Budget, on a cheerful note of rising prices and turnover. The sensation of the week has been the boom in GERMAN bonds. When these boil over, as they will very soon, the turn will come for other foreign bonds. JAPANESE should return to favour, but I would advise the investor to avoid the "iron curtain" and, if he must speculate, keep to the bonds of gallant GREECE which have already had a market run. (There is a 4 per cent. Greek railway loan which can still be bought at about 131.) It is worth noting that while there are no Argentine bonds on the market, there are plenty of sterling com- pany shares which have been depressed by the refusal of the Argentine Government to allow remittances of profits and dividends.
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SOME notice was taken in the financial Press of the recent visit of Mr. Eugene Black, President of the World Bank, to the Argen- tine and his interview with President Peron. If Argentina wants to attract American capital for the development of her industry and oil, it is expected that she will first be asked to satisfy"foreign capital in the matter of the blocked remittances. Certainly, the country could now afford to relax her cur- rency restrictions. In 1953 she secured a surplus on her balance of payments of 1,771 mn. pesos against a deficit of 1,890 mn. pesos in the previous year. This was due largely to the cut in imports, so that foreign countries cannot expect the benefit of this recovery to go to them rather than to the Argentine consumer. However, a partial resumption of foreign remittances should be possible and sterling companies should be treated more favourably seeing that Argen- tina has a huge surplus in her trade with Great Britain.
IF the investor does not want to speculate on the good intentions of Senor Peron he might safely buy the shares of FORESTAL LAND which, having opened up a tanning extract business in South Africa, is no longer dependent on Argentina. In the year to December, 1952, the Company earned 48 per cent. and paid 12 per cent. These earn- ings included the profit from Argentine quebracho, which could not be remitted, s° that if Senor Peron relaxed the ban 0,° remittances the dividend could be immear, ately increased. Actually the dividend 0 12 per cent. was paid from reserves, for the South African profits have so far been. ploughed back, into the business. The l95-1, earnings will undoubtedly be higher and before long the shareholders will reap in° benefit of the new developments. Either the dividend will be raised or another bonus dis' tributed. A bonus of one-in-four was dis' tributed in July last year and as the interim dividend was maintained at 3 per cent. the market is expecting at least the 12 per cent. again for the year. At 39s. 6d. the shares would then yield over 6 per cent.
WILLIAM DOXFORD £1 shares have risen to 43s. on the maintenance of the 5 per cent. interim dividend on an increased capital. They were as low as 32s. this year and on their past record thay well deserve their present, price. The future of British star)" building is not so rosy but the chairman- stated in October last that they had three years work ahead and on account of their popular marine oil-engines they are not s° vulnerable a trade as other shipbuilders; For five years they have regularly distributed bonus shares—from one-in-ten to one-in' fourteen last September. In January this year they distributed one-for-one and it is clear from the present announcement that they will pay 14 per cent. or 15 per cent, m, all for the year ending June, 1954, against the equivalent of 111 per cent. in the previous year. At 43s. the shares yield 7 per cent. 0 the distribution is 15 per cent.
1 AM asked by a small investor whether ENGLISH STOCKINGS at 71d. can be regarded as a reasonable investment. It is so rare to find a "penny share" with any investrneat status that I replied in the affirmative, b,11,.,` it is an unusual stockings share, having 01 per cent. of its investments in Klinger Manufacturing and the balance spread over a wide range of industries. In 1953 It raised its dividend to 20 per cent. out of earnings of 25 per cent., so that the yield is over 101 per cent. Klinger having last pali. 25 per cent. out of earnings of 50 per ceali; there is some security behind Englisis. Stockings.
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