STRENGTH IN BRITISH FUNDS
By Our City Editor With the heaviest morning letter bag for many months, and the Anglo-German agreement contributing to the many favourable factors., which have recently been combining for the encouragement of the " bulls," and the consternation of the " bears," the new Stock Exchange Account opened last Monday with considerable animation, although profit-taking was sufficiently substantial to restrict further advances after an initial, all-round burst of activity. Dealings slackened off in the afternoon, due, no doubt, to the absence of the impetus, one way or the other, usually imparted by Wall Street, which was closed on Monday in celebration of Independence Day. Subsequently quieter conditions have prevailed, although the undertone remained firm, with bargain-hunting still in evidence. The full effect of the German debt settlement was felt in the Foreign market on Monday, the previous Friday's big gains in Austrian and German loans being further improved upon. A notable feature of the markets was the strength displayed by British Funds, which provided general good gains at the beginning of the week on persistent investment demand. Weekend strength in Wall Street was a favourable influence on International stocks at the start of the week but, on Tuesday, buyers tended to hold off on the idea that a bout of profit-taking was overdue. This expectation proved correct. and the American market moved temporarily easier, although
the setback was soon checked by a renewed wave of buying.
Now Marking Up!
Despite the fact that we are nearing the peak of the summer holiday season, business is again returning to the Stock Markets, although, so far, price gains have been more due to a reversal of last year's procedure of marking down on the part of the jobbers, a process which 1 strongly criticised on several occasions. Generally speaking, markets are denuded of available supplies of stock at anywhere approaching current quotations, with the result that it requires comparatively little buying to clear the jobbers out. This is an unsatisfactory position from the point of view of Stock Exchange business, because it tends to cause unhealthily steep rises without the benefit of a large, accompanying turnover of business.
Shares to Note
It is rumoured in the market that a useful Government contract has recently been secured by Aero Engines, Ltd. This Company has had rather a chequered career since its formation in June, 1935, but at the current price of Is. 6d. the Ordinary 5s. shares do not appear dear as a speculation.
Strength of newsprint shares in Montreal has been accompanied by demand for corresponding issues in London, and is due, I hear from a knowledgeable source, to absorption on behalf of a well-known operator. Participation by the small investor is dangerous. Trinidad Consolidated Oilfields 10s. shares continued in demand during the past week up to around half-a-guinea, and derived an additional stimulus on Monday from the publication of the June production at 80,678 barrels, against 66,404 barrels for May, an increase of over 21 per cent. Among very small-priced issues in the Oil section, I hear well of the Common $5 shares of British Controlled Oilfields, which have recently come up to around 3s. British Controlled issues have been deriving strength from the long rise in Trinidad Petroleum Development £1 shares, of which the former concern holds 50 per cent.
There has been further quiet demand for the 5s. Ordinary shares of Ciro Pearls (Holdings), and the price is somewhat firmer at around ls. Mid. Among miscellaneous Copper issues, Messina (Transvaal) Development 5s. shares, which I also mentioned in my last article, rose sharply last week from 13s. 6d. to around 16s.
Midland Bank Dividend
The Directors of the Midland Bank Limited announce an Interim Dividend for the half-year ended June 30 last at the rate of 16 per cent. per annum less Income Tax, payable on July 15 next. The same rate of dividend was declared a year ago.