Investment Notes
By CUSTOS
Lniouut equity shares remain firm under- _ neath, the upward driving force has been transferred to the gilt-edged market which nothing seems to stop-not even a flood of new krues (£150 million so far this year). After the , corporation issues-Paisley, Warwickshire, r'YntOuth and Southampton, which are busily gcing to higher premiums-comes New Zealand ‘71'.(t11..a £10 million 6 per cent. issue dated 1975/ - at 97. These are attractive terms and the loan Ssurely open at a good premium. The impres- sgains ground that these will be the last of 6 Per cent. loans at 2 or 3 discount. So the Institutions will be buyers. With unemployment °ving up to 2.1 per cent. of the working popula- leavers-there'°'1"--larl cause of the big bulge of school- s more and more reason to sup- ine that the Government will welcome a further fall in the rate of interest. So far this year War ,
1-oan has risen 20 per cent. and may still have another 10 per cent. in its stride.
(30 Shares and Burmah 8,11'lle outbreak of a minor petrol war in the ,„'Ll;s11 market-inevitable while such a huge „" As a speculation one could buy Lobitos (the cheapest way of buying Burmah) hoping that an American company will outbid Burmah. Cussons Readers who followed my original recom- mendation of CUSSONS, makers of soap, talcum powder and other toilet products, would have made a lot of money as the shares doubled in the last eighteen months. I call attention to these shares again because they have fallen from 26s. 9d. this year to 17s. 6d. and have now recovered to 22s. to yield 3.8 per cent. They are still worth buying-on an earnings yield of 8.4 per cent.- but time is short. Earnings have more than trebled over the past ten years and it is thought that a very profitable trading period is about to open. Apparently 30 per cent. of the public ex- penditure on toilet preparations is made by un- married people of between fifteen and twenty- four and in the next five years the teenage popu- lation is going to increase by 15 per cent. The number of school-leavers entering paid employ- ment this year is actually 26 per cent. higher than in 1961 and no less than 46 per cent. more than in 1959. The company should certainly take full advantage of this trading opportunity, for its Imperial Leather toilet preparations are very popular. De La Rue New shares free of stamp can still be bought of DE LA RUE. This company is now well diversi- fied over banknote printing (with Security Ex- press Ltd. added), Formica (laminated plastics), domestic heating appliances (Thomas Potterton) and computers (in association with the French Machines Bull). The Formica profits have lately declined through competition and the restriction of the home market but I believe sales are now increasing again with new designs and colours Profits in the first quarter were running well ahead of the 1961 level-this is one of the few companies issuing quarterly reports-and with earnings nearly double the dividend of 13+ per cent. there is scope for a dividend increase in due course. At 42s. the shares yield 3.2 per cent. on dividends and nearly 6 per cent. on last earnings.
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