Market Notes
By CUSTOS
TE new account on the Stock Exchange opened brighter in anticipation of the return of the ICI application money (over £200 million) but cheerfulness quickly evaporated after Wall Street had had another 'black' Monday with share prices falling to new low levels for the year. The Dow Jones industrial average at 758 has now fallen about 24 per cent from its top. Tighter and tighter credit and greater and greater uncertainty over the Vietnam war are the factors chiefly responsible for these American 'blues.' In Throgmorton Street there is a tendency for indus- trial shares to harden on the grounds that Mr Harold Wilson, if he survives trade union attacks, will really put industrial Britain right. The diffi- culty is to find the shares which are not going to have sharp dividend cuts. There has been some movement into insurance shares on an expert broker's circular that the worst has been seen. Certainly the American underwriting losses in the first half of the year were considerably lower in all cases except NORTHERN AND EMPLOYERS. The market has had a sufficient rise, the yields now varying from 4 per cent on GENERAL ACCIDENT tO nearly 5.2 per cent on COMMERCIAL UNION. Another group which is attracting more attention is the property market where some equities are selling at a big discount on their net break-up values. For example, CAPITAL AND COUNTIES at 7s. are some 30 per cent below net asset value. Income for this company will steadily increase over the next few years from reversions, particularly in the Knightsbridge district, where a new develop- ment area will arise when the Woollands block is pulled down on amalgamation with Harvey Nichols. Although store shares are not a very popular market at the moment in view of SET and the credit squeeze, TIMES FURNISHING has had a come-back on a rise in pre-tax profits in the first six months of not less than 56 per cent. Most of this recovery seems to have been due to the tailoring section (Willerby Tailoring) which was responsible for 30 per cent of the total profits last year. These shares have recovered sharply to 7s. but still yield 7.1 per cent on a price/earn- ings ratio of 10.1. Gold shares fell away again on further consideration of the IMF meeting which brought a rise in the gold price no nearer. Deal- ings opened in the new ICI 8 per cent Loan Stock on Wednesday at 6 per cent premium. The gilt- edged market moved further ahead on the slight improvement in the gold reserves—the first rise since February.
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