IRREGULAR AFTER SETBACK
No Selling Pressure
By Our • City Editor
Anxieties concerning the Spanish situation obtruded themselves upon the stock markets at the beginning of the past week, resulting in an all-round setback on Monday. The Foreign Minister's statement with reference to the shipping situation in the Mediterranean had a salutary effect on markets on Tuesday, since when conditions have been irregular with a considerable decrease in the volume of business. However, less public interest is usual with the approach of the Christmas season, and we must now be prepared for a quieter time until the New Year.
Recent events have failed to produce any widespread pressure of selling, and the greatest price recessions have been confined to shares that have lately been the centre of exceptional speculative activity, such as Rhodesian Coppers, Oils, and certain Industrials. This setback has served to shake-out weak holders, who were interested beyond their means, and the technical position is healthier in consequence. Apart from selling on this account, the undertone has been firm. It is certain that any reassuring news concerning the Mediterranean situation would find markets very responsive.
Investment Review In my Last two articles I discussed the purpose of an investment lig, indicating its usefulness as a means to gauging the distribution of one's capital in relation to security, income. and opportunity for profit. Finally, I am going to review an imaginary example of an investment list in which I have purposely included points of weakness.
As a matter Of greater interest, I have compiled the following list of holdings, representative of a total original outlay of about £1,000, including expenses, from shares mentioned in these articles. I have assumed the purchase prices to be those reigning at the time of discussion.
Share Number Ariston Gold Mines 75 Argenting Navigation Pref. 300 British Thermostat 75 Clover Paint Pref. 400 Argentine Navigation Pref. 225 Present Price 10s. 9d. 23s. Gd. 22s. Dd. 25s, lid. 10s. 6d.
In consideration of the above list, the holder might he said to have chosen moderately well in that the combined value to-day is approximately £1,100, representing 20 per cent. capital appreciation. On the other hand, had markets been less active during recent months there might have been as great a percentage of depreciation. While all the shares are individually attractive in their way, I should say that their combination for the investment of £1,000 could only be regarded as a " fair weather" policy, allowing little power of resistance against adverse conditions. Moreover, the present average yield of about 41 per cent. is inadequate in proportion to the risk involved.
Interests are quite well-spread in the above list. Clover Paint £1 71 per cent. Preference is the soundest share, but £500 is too prominent a representation of them. Argentine Navigation Preference are promising, but 100 shares would be sufficient. British Thermostat have doubled their purchase price of about Hs. 6d., and now appear over-valued: these should be sold. Plowman, Barrett 5 per cent. Preference is a " recovery " share, and unsuitable for inclusion in such a list. The small Gold
interest is sound through Ariston. For reasonable security half the capital shod be realised as indicated, and re-invests between a gilt-edged stock, such as Wi Loan, and a guaranteed Home Rail stoel of which there are several yielding upwar( of 4 per cent. The remaining shares woul then be suitably represented for the respective purposes.
The increasing usage of reinforced car crete for all kinds of constructional war is said to be having a very favourable effe( on the business of the Trussed Cencret Steel Co., Ltd. This company was forme in 1907 for the purpose of developing reir forced concrete in accordance wit patents acquired from an American cot cern. It is now recognised as specialists i the design and construction of buildire and has to its record some 7,000 structure The company are besides the patentees of soundproof flooring, and a roofing slab d( signed to relieve the rays of the sun on fla.
roofed buildings. Both products are i increasing demand.
Prospectus particulars, published i April last, stated that the net assets of th company amounted to £244,000, whic compares favourably with the issued cap tal of £222,000, comprising £50,000 in 6 pe cent. Cumulative Preference 10s. share: and the remainder in Ordinary 5s. share: Profits for the past three years to Decemlac 31 last were certified as £8,733, £22,77( and £27,466. On the basis of the 193 profits, the Preference dividend is covere4 nine times, and over 14 per cent. remain on the Ordinary capital.
The Ordinary 5s. shares have been ii good demand recently, and are now obtain able around I Is. They are regarded as ; promising holding,
Manchester has been bidding 4s. 6d. foi the LI 71 per cent. Cumulative Preference shares of the Amalgamated Cotton Mill: Trust, which are in arrears of dividenc since April 30, 1935. The shares are con. sidered an attractive speculation in view of the recent improvement in the Textile industry. They are difficult to obtain, but a patient buyer should be able to " get on " around 5s.