Market notes
CUSTOS
It is difficult to see why the stock markets should have been firmer because of the hand- shakes at the summit meeting at Glassboro, USA, but gilt-edged stocks are described as being in a state of 'inanition.' Sterling is still un- steady at a shade under $2.79. That many investors are nervous about the outlook was shown by the sharp rise in the investment dollar premium to 27 per cent. At the moment of writing it has come back to 251 per cent. This does not mean that investors think that sterling may be devaluated by 254 per cent. Even if it were ever devalued by 20 per cent there would be at least a 5 per cent premium because the 'growth' potential of dollar equity shares is regarded as much higher than that of British equities. The rise in the investment dollar pre- mium is all the more remarkable seeing that Wall Street is showing signs of being vulner- able and `toppy.' The market has not liked Mr McChesney Martin's call for a tax sur- charge higher than the 6 per cent proposed by President Johnson.
Equity shares in Throgmorton Street have recovered somewhat from the fall at the end of last week, but where rises have been held it is usually because of the technical 'short' position. English Electric regained the Is lost when the bid for Elliott-Automation was an- nounced and GEC rose on the slightly-better- than-expected results and the f per cent in- crease in the dividend to 101 per cent. At 50s 9d the yield is not exciting at 3.9 per cent. Rank- Hovis was also higher at 28s 74d to yield 5.6 per cent on the increased profits which followed on the rise in the price of bread.. The equity of a company which deals in a commodity which is sensitive to political interference must always command a higher- than-average yield.
There have been great goings-on in the shares of the popular mining gamble—Western Min- ing of Australia. After touching 174s, the shares promptly fell by over 20s when it was an- nounced that Selection Trust had acquired a 10 per cent interest. This suggested that the aggressive buying would now slow down. At the moment of writing the price has dropped to 155s. Selection Trust remains firm at its high level of 77s to yield 4.2 per cent. This is the same yield as that offered by Charter Con- solidated, which has recently exercised its option to acquire over 7f million RTZ shares at. 25s lid, the present price being 51s 6d. Every long-term investor should hold on to these great mining house equities.
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