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PatSystems - Benefits from War induced volatility

April 2003

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

One company which has benefited from war-induced volatility is Patsystems (4.5p). The company, which  supplies  front end derivative trading and  settlement & matching systems, had already seen increasing demand for its services, even before the volatile market conditions caused by the war, helped by the general hardening of insurance rates. It benefits from rising insurance rates because when companies find insurance costs rising they are more inclined to use derivatives for risk transfer.Still lossmaking, the shares transferred from the Full List to AIM in January and handed back surplus cash of £9.9m at the time (equating to 7.5p a share). Adjusting for the £0.6m cost of this exercise, the busines ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

All material on this website is protected by copyright. You may use Information retrieved from the www.scsw.co.uk website for your own personal non-commercial use which means that you may not sell or copy this information to any third party without prior written consent. ISSN 1358-183X

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