Portfolio
Away from the home front
Nephew Wilde
In the midst of last week's argeybargey of industrial unrest I felt the national newspaper printers all did us a service. How nice it was to have a break from the communicationsmedia's daily assessment of the country's misfortunes. I wondered if the Government engineered this tactical silence. However, at times I did find myself at loss, sitting in my leather chair at the Club with my arms outstretched holding an imaginary newspaper and staring into space.
Unfortunately this temporary peace was disturbed on Thursday morning when my stockbroker Wotherspool telephoned.
" Very well timed," he said. "They are up 25p on the bid." "What are?" I asked eagerly. Amey, of course, there's a further bid from Consolidated Goldfields." Tears came into my eyes and I managed to whisper "don't you remember, Wotherspool, you incompetent fool, I sold them last week — you agreed it didn't seem likely Consols would make a further offer."
The news was further exacerbated by the dock strike which, naturally enough, is having a depressing effect on share prices generally. How long this will continue is anyone's guess, but in the case of dockers faced with redundancy the air of opinion seems to be that it is better to strike for nothing than to work for nothing. So all is gloom on the City front and not surprisingly so. For not only will UK buyers be reluctant to enter the market but overseas investors too. I am prepared for a bumpy ride ahead but I see no reason to sell in a panic. The worst hit companies will of course be the major exporters. And looking down my portfolio Dexion is about the largest, with overseas sales accounting for about 20 per cent of total turnover.
So, by and large, the companies appear fairly well placed. I am encouraged, however, to increase my holding in overseas companies. The situations that spring to mind are Harrisons & Crosfield, Sime Darby and Ralli International. The shares of all are near their respective peaks for the year, and no wonder In view of both effective devaluation of the £ and industrial unrest in the UK. It is hard to differentiate their relative attractions; H & C has a long-standing record whilst Sime Darby and Ralli are rather more go-go situations. As a result, I am buying all three and selling Dexion, A. J. Mills and Avonmouth Engineering.
H & C and Sime Darby are fine examples of the entrepeneurial trading spirit of the early merchant adventurers. And the relative attractions of their operations, in the Far East especially, have been grasped by Ralli's Malcolm Horsman.
Harrisons & Crosfield has been trading in the East for about a hundred years. It has large interests in Malaysian agriculture as well as trading activity elsewhere throughout the world. Through cross-holding with other quoted companies H & C is virtually immunised against any takeover.
Sime Darby has sprung alive more recently following its merger with R. G. Shaw. It has been quick to grasp the potential benefits of trading in the East. In the same way Ralli has established a world-wide trading group, mainly through acquisition. Even if the pace of purchases slows down, however, strong organic growth should be achieved.
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