31 MAY 1957, Page 37


By CUSTOS WHENEVER War Loan falls below 70 and 24 per cent. Consols and Daltons drop to around 50 there will generally be some press com- ment to remind us that historically it has always been right to buy at these levels. So it happened over the weekend and early this week the gilt- edged market staged its recovery. Actually there has not yet been an opportunity to, buy old Consols or Daltons under 50 and secure a full 5 per cent. in perpetuity, but War Loan did fall at one time to 681 to yield about £5 Is. per cent. Frankly I do not find perpetuity such a great attraction in the hydrogen-bomb age. But a cer- tain capital appreciation of 25 per cent, over the next ten years is a proposition that should appeal to everyone. This can be obtained by buying 24 per cent. Savings 1964-67 at 80. The tax-free capital profit of 20 points, if 'grossed-up,' gives an equivalent true gross yield to redemption of £6 17s, per cent. Risk another three years and buy 3 per cent. Savings 1960-70 at 77 and you obtain an eventual capital profit of 23 points which gives a 'grossed-up' yield to redemption of 7 per cent. Is the value of money likely to fall 25 per cent. in ten years? Or 30 per cent. in thirteen years That is the question which investors must answc for themselves.

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Industrial shares remain dull and have no receded about 3 per cent, from their recent peat The sharpest setback has been in oils, whie always react to a decline in Wall Street, whet- the fear of disarmament is presently upsettin bullish sentiment. Incidentally, the recent buyin of CANADIAN EAGLE bearer by Frenchmen runnin away from the devaluation gives.an opportunity British holders to take profits on a share whiel now yields under 3 per cent. I still prefer BURMAI on, at 108s. 6d. in spite of the chairman's coin plaints of Indian politics. The value of its invest ments in BRITISH PETROLEUM and SHELL at today' prices is approximately 114s. The market valuing at nil the Indian, Pakistan and Burnies, business which contributed £74 million to the group profits last year. Burmah Oil at 108s. 6c1 to yield over 4 per cent, seems still very attractive

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Mr. Vernon, the chairman of SPILL1 RS, in 111 annual statement to shareholders will not mak t many investors keen to buy milling shares. Whea prices have fallen through over-supply and impoi prices have been further depressed by the declint in freight rates. Millers have therefore been in volved in heavy stock losses. To make matter! worse, something like a price-cutting war in flout has been waged between Ranks and Spillers tc secure or hold bakery orders. Spillers have a large! cattle-food trade to offset the difficulties in the bakery business, but even here demand has beer falling recently as a result of the mild weather At 43s. 6d. Spillers yield 5.9 per cent. on the 13 per cent, dividend, while RANKS' 10s. shares at 18s. yield only 51 per cent, on the indiCated dividend of 10 per cent. On the whole I prefer Spillers.