P. & O. DEFERRED STOCK.

Dominion, Volume 5, Issue 1427, 30 April 1912, Page 5

P. & O. DEFERRED STOCK.

GREAT EISE IN VALUE. By Telegraph—Press Assooiation-Oopyright. (Rec. April 29, 9.35 p.m.) London, April 29. The P. and 0. Company's deferred stock.is quoted at £i\h. "The "Financial Times" of March 19 says:—During tho past three'months there have been a series of sharp fluctuations in the price of the deferred stock of the Peninsular and -Oriental Steam Navigation Company. Yesterday there occurred another of these sudden advances, an advance of 10 being scored, raising the price to 2130. This movement, and those which havo preceded it, have aroused a great deal of interest concerning what may be going on, and have also been the cause of many inaccurate rumours, most of which have been based upon the suggestion that the company is purchasing one or other of the competing lines. We believe the facts are that negotiations are taking placo whereby tho principal English lines trading to the East and Australia will probably come under one control. The scheme is, however, so comprehensive that it will take some time to complete, but that it will reach a successful conclusion appears to admit of very little doubt. So far as the public is concerned, the result would be, in all probability, to provide a better service than at present at a lower price, while the companies would, according to tho estimates which have been drawn up, earn a larger return on its capital than is possible under existing conditions. Such a combination of interests would, of course, bo dominated bv the P. and O. Company, which is the most powerful organisation of its kind trading in Eastern waters, and a comparative valuation of the assets of the respective undertakings . serves to bring out the position of the P. and 0. Compnnv in even a more favourable light than is generally supposed. Whether or not the capital issues of. other members of the group of English shipping companies trading to tho Orient will experience a similar upward movement m the market value of their capital issues remains to be seen, but it is, at least, a fact that these undertakings are all enjnving great prosperity just now, notwith«fandirg the coal strike, and are looking forward to n ve'ar of record earnings. Freights are higher than they have been for 'a long time, while the volume of business is also greater than usual. It is true Hint working costs have advanced, but the increase in this has onlv absorbed a comparatively small proportion of the exnansion in gross receipts. Quite apart from any ouestinn nf closer co-operation, therefore, the outlook .is encouraging: but this extra factor in the situation iustifies the belief that most, of Ihe capital i=sues of the companies concerned stand lower than they will do a few months hence.