5 MAY 1967, Page 24

Market notes


The equity share markets recovered quickly from their sharp short fall last week. The main reason was the Government's announcement of 28 July as the steel vesting day, which pointed to a coming influx of money into equity shares. There was quite a rush into the steel nationalisation stocks, including the equity shares, because there is now very little guess- work to be done and the dividends expected are a useful income gain for the institutions.

The Government's intention to apply for membership of the Enc did not have any notice- able effect on markets. Even if the application is acceded to there will be a long delay before it is implemented. Moreover, a number of maufacturers, such as the motor giants, are anticipating losses rather than gains. There will, of course, be special cases of gain for special companies. VIYELLA, for example: but the reason these shares have recently risen strongly to lis 3d to yield 6.1 per cent is the revival of rumours of a merger with COURTAULDS.

An interesting report has been put out by a leading firm of brokers on the comparative merits of retail trade and manufacturing shares. They point out that retailing has achieved a more consistent and substantial profit growth than manufacturing industry over the last ten years. Yet retail trade shares have recently been a depressed market. This is considered strange because, when reflation comes, the im- mediate beneficiaries will be the retail trading companies. Whether the Chtncellor is plan- ning early or late reflation, the certainty is that wages will rise quite sharply after July. This should bring a revival in the store shares group and this firm of brokers especially recom- mend BRITISH HOME STORES, GREAT UNIVERSAL STORES, MARKS AND SPENCER, UNITED DRAPERY

and woomoant's. The yields obtainable are 4.4, 3.6, 4.1, 5.1 and 5.2 per cent respectively.

John Bull is on holiday