Page 2, 19th February 1937

19th February 1937
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Page 2, 19th February 1937 — The City
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The City

MARKETS QUIET WITH STRONG

FEATURES

Coppers and Diamonds Advance

By Our City Editor

The Stock Markets entered upon the new Account last Monday with a fair degree of confidence, although demand was mainly concerned with commodity stocks and all those calculated to benefit from rearmament expenditure. Continued lack of business made itself felt as the week progressed, however, and markets resumed their recent sluggish trend, with the excep tion of a number of individual features. Apart from a further all-round decline in the Gilt-edged section, the somewhat sudden Defence Loan announcement has had a consolatory effect rather than otherwise, since it has clarified some of the uncertainties, which have been overshadowing the Stock Exchange of recent weeks.

In regard to the future course of markets, the news that the Defence Loan is to be raised on a 3 per cent. basis must quell recent fears that the cheap-money era was coming to an end. This means that investment funds are likely to continue to seek income in a wide field of Industrial securities. Expenditure on the Defence programme will assure good business for the Aircraft, Engineering, and Iron and Steel industries for at least another five years, while the increasing wage brit of representative firms will concede an indirect benefit to a number of other trades, notably food, brewing, tobacco and clothing. Readers should continue to pay attention to the commodity groeps. especially Copper and other Base Metals, Rubber and Oil. Gold shares should continue in demand.

Features

Despite generally quiet conditions in the Stock Exchange during the greater part of the past week, there were some individual

instances of outstanding activity. Giltedged stocks were again dull at the beginning of the week, but have since recovered from the worst levels. General weakness was displayed among Home Rails, but Argentines were firmer, particularly B.A.

Western at £31. Industrials have been irregular. Irons and Steels rose on Monday on rearmament prospects, but the improvement was not maintained. Pinchin Johnsons were firm among leading shares, while Raleigh Cycles were another good

spot. Breweries showed small improvements, but Tobaccos were dull. Transatlantics have been dull, with the exception of Brazil Tractions, which were a strong spot on Tuesday. Business continued fairly active among Oil shares, and prices were mostly higher, notably Canadian Eagles. Rubbers showed little change.

Greatest interest during the past week was centred on Mining shares, especially Rhodesian Copper and .Diamend 'issues. The former group was stimulated by the further decline in world stocks of the metal, and a continued rise in the price. Rhodesian Anglo-Americans and Rhokanas

were the best features. Diamonds were enlivened by demand from Amsterdam sources, De Beers Deferred being in particular request. Among Gold shares, several non-producing Kaffirs returned to favour on Tuesday, prominent gains being achieved by East Rand Consols, and Western Reefs. Elsewhere, Westralians had improvement in Wilunas, while West Africans were generally progressive, Aristons being a strong spot up to 14s. Among Base Metals, San Franciscos came in for brisk demand at the beginning of the week.

Canning Town Glass

In these days when so many drinks and foodstuffs arc to be had out of bottles and tins, and packing plays such an important part in marketing many goods, glass containers should be in increasing demand by manufacturers. I understand that Canning Town Glass Works Ltd., one of the largest manufacturers of bottles, jars and tumblers in the country, is doing exceptionally well.

The 5s. shares of this Company have recently been in good demand up to around 7s. on expectations of an increase in the past year's dividend from 6 to 7+ per cent. The net trading profit for 1935 expanded from £32,099 to £40,090, equivalent to 11.2 per cent. on the issued capital of £358,740. The dividend was raised from 5 to 6 per cent. The Chairman stated at the meeting in April last, that the past year's trading to that date had been more than maintained compared with the same period of 1935. Moreover, recent alterations to plant to promote economies in fuel costs are expected to have conceded a marked benefit to the past year's trading. The shares are a particularly sound Industrial investment owing to the strength of the Company's financial position, and the conservative management. The Company owns two factories—one at Canning Town and the other at Queenborough, the latter being devoted to the manufacture of ambercoloured glassware. The 1936 accounts and dividend are due in March.

Star Ex.

For those who require an indirect interest in recently active mining issues, the Is, shares of Star Exploration Ltd., now obtainable around Is. 6d., can be recommended as an attractive medium.

This mining-finance Company has a sound record, having paid a dividend of 10 per cent. for the past six years in succession to October 31 last. On the basis of this rate, the shares now yield about 8 per cent. The Company's investment portfolio is representative of at least 75 different classes of shares, 98 per cent. of which are quoted on the London Stock Exchange. Mining interests include all the recently active sections, non-producing Kaffirs, West Africans and Rhodesian Coppers, and number such important shares as Amalgamated Banket Areas, Brakpan Mines, Dominion Reefs, Gold Coast Selection Trust, Klerksdorp, Rhodesian AngloAmericans and Spaarwater. Since the last meeting on December 11, at least 75 per cent. of the Company's holdings have experienced further considerable appreciation. At that date investments had a value in the Stock Exchange similar to the amount showing in the Company's books, and assets consisted of shares and cash showing the capital of £100,000 to be intact, together with a reserve of £21,000, and an additional £16,000. It is calculable that the further appreciation in holdings during the CompanPs current financial year must give the shares a break-up value of at least Is. 6d.

Points

George Spencer, Moulton Ss. shares have been in good demand during the past week up to around 3s. 6d. They are worth attention.

Seekers for small-priced industrials, might consider the 2s. shares of The Wright Saddle Company, recently introduced to the market around 3s. 6d., and now 3s. 9d. Company manufactures the well-known cycle saddles and tool bags of that name.




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