WISE INVESTMENT NEITHER the -investor- nor the speculator will shed

any tears at the passing of N.D.C. What was, at best, a clumsy tax gives place to some new arrangement, as yet undefined, which will at least have the merit of spreading the-_burden_more evenly and with greater certainty. So we may _get out our slide rules again and renew our quest of available earnings totals and the resultant merits of equity shares. The total tax burden, it seems, is not to be reduced but the incidence will, be changed. Broadly, I should say that commodity pro- ducers (copper, oil, rubber, diamonds, &c.) and industries such as engineering, iron and steel and shipping, will gain, and thOse companies which haye enjoyed relatively stable prosperity (e.g., retail stores, tobaccO) will now be asked for a little more.

Removal of-N.D.C, does not, -of-course; put an end to all the , investor's 'worries: The- gold- price scare remains, even if it has been pushed into the background, but markets are technically so sound that the rallying tendency already appitrent will probably be well maintained. I should nOw like' to see a trade agreerhent between Great Britain and the

United States paving the way towards economic disarmament .

on p wider scale, and until this Is achieved market recovery will be a slow and rather hesitant process.

hold the investment market firm for its rearmament financing for a longir perind. than Would: have been pbssible if a sharp rise: in commodity and security values had put a strain on credit resources. Holders of gilt-edged and sound flied-

In every case, except the last, the fixed dividend is covered by a very ample margin, and in all cases the earnings outlook is encouraging, holding out the promise of a further strengthening of the cover. The shares are not, of course, gilt-edged, but are suggested as good value for money in the sense that they offer an adequate yield in relation' to the degree of capital and income cover. The average, yield on an, investment spread evenly over the group would be £4 i8s. 6d.- per cent.

* * * * WELSH COAL REVIVAL

Given peace in industry and freedom from major international disturbance, the Welsh coal companies are set for a year of really good track. The home martun has held up well .ever since the iron and steel recovery set in, but it is exports, not home demand, that spell prosperity or otherwise for the Welsh field. As I intimated in February, the tide has turned, and shipments of coal are now rising rapidly. The official returns for April show an increase in Welsh exports of 411,096 tons, or nearly 4o per cent: compared- with April; 1936. For the first four months of 1937 the total has reached 5,954,632 tons, a rise of just under z,000,000 tons, or 20 per cent. over the corresponding period of last year. This is substantial progress, and it is firmly based.

Thestip: ping arrival has brought an increase in kuaker_ trade, and the more pFoilierotk condition tiT ilielitigistiar-r

* * * *

GOOD-PREFERENCE SHARE YIELDS . _ ' .

If, as. I suspect, speculation is to, be less effervesc.ent than it has.been in recent months, the Government shonldbe able-to inttirest shares .shenild therefore be able to,. sleep peacefully-, again while' the :speculator lies awake. Continuing our search for good preference shares Offering reasonable yields; we May.

examine this week the following list : No. of Times - Dividend Covered. -

Lancashire Steel 5% Cumula- tive £1 Preference .. 7

-Current -. Price. - A, 21 9

)rielck%;

- -

- s: d-.

4 12 0 Pease and Partners 5% Cumu- lative Li Preference..

31 23 0 5 o o

Powell Duffryn .Associated

Collieries 41% £i Cumulative

Preference .. • • • - 44

zo . 6.

412

9 Elephant Trading 5i% Cumu- lative Li Preference.. 41

22

6

4 -17

9 Welsh Associated Collieries

5i% Cumulative Li Prefer-

ence .. 2 20

o 5 to o

producing countries has enabled these old customers to pay the higher prices which Welsh coal—acknowledged to be the best in the world for many purposes =naturally commands. The balance of power has thus swung again in favour of the seller in the coal export market, and despite the competition of Germany and Poland, Welsh exporters are getting satisfactory prices. Most companies, I understand, are booked well ahead and there is a widespread confidence in the outlook such as has not been felt in South Wales for many years.

THREE SOUTH WALES SHARES

In the share market there is a fairly wide range of issues through which investors may participate in the Welsh coal revival. Powell Duffryn kx Ordinary, at 24s. 3d., is perhaps as good as any for those who like income as well as a chance of capital appreciation. On the last dividend of 6 per cent. the yield is nearly 5 per cent. and a rise in the dividend rate should not be long delayed. Another share with yield attraction is Tredegar Iron and Coal Li " B " Ordinary, quoted at 21$. 6d. For the year ended March 3rst, 1937, profits have risen mater- ially and the dividend has been stepped up from 3 to 4 per cent. free of tax. On this basis the yield is 31 per cent. tax free, or 5 per cent. less tax, a reasonable return in the light of the favour- able prospects for the current year.

Investors with more than half an eye on capital appreciation rather than immediate income yield might consider Ocean Coal and Wilsons Li Ordinaries at 16s. The immediate return of .2f per cent. on last year's 2 per cent. dividend is not very appetising, but the prospects are distinctly promising, the Company's earnings having risen sharply during the past six months. Before the slump dividends ranged between 4 and 5 per cent., and a return to something at least as profitable as that level should soon be achieved. If, as I anticipate, the 1937 dividend is 4 per cent., buyers at today's price will receive 5 per cent. on their outlay.

*

Venturers' Corner

In more favourable market conditions the latest accounts of the Brazilian Traction, :Light and Power .Company would have been the signal for speculative buying of the aWin. shares. The net revenue of this Canadian-controlled utility rose last year, in sterling, from £1,042,000 to £1,248,003, reflecting the widespread ixnprovetneut in Brazilian trade. The combined services of the Company's organisation expanded: in all operating sections. There was a gain of 7.17-per in passengers carried ; 10:34 percent. -in- electricity' sales; 11.28 per cent. in telephones ; and 6.35 per cent. in gis. ' As usual, the board has made liberal alloy-knees-for depreciation and renewals, and, apart from an itinneitselY strong cash positina, the balance-sheet now shoWS .aggfegife. reserves of 184,831,301 dollars, against a total outstanding capital stock of 181,389,973 dollars.

It is one thing to earn profits in Brazil ; it is another to obtain the necessary funds to remit profits, which are made in milreis, across the exchange to enable the shareholders to receive dividends in Canadian dollars. Last year, however, two pay- ments, amounting to 70 cents per share, were made, out of available earnings of 88i cents, and a dividend of 5o cents per share has already been declared on account of 1937. As Brazil's export trade is growing and the tendency of the milreis exchange is to get stronger, the problem of remitting funds should become gradually less harassing, while the Company's earnings still have plenty of scope for expansion. Brazil Traction common shares, quoted at 231:dollars, are a popular international speculative counter and subject to rapid move- ments. They ire nbt for those who tremble'ut day-to-day fluctuations, but should do welt for the speculator with patience [Readers' enquiries, or requests for advice, 'yarding particular shares will be answered periedicsdly as space permits.. Corre- spoNdehts who dr not desire their names toappearshould appen4