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Market Comment

February 2007

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.

It has been interesting to observe that fund managers with a rovingbrief and unconstrained by benchmarks have been prepared to increasetheir weightings in UK smaller companies, though this has not been wellpublicised. What is well known is that such managers have beenincreasing their holdings in FTSE-100 companies for some time and morerecently into the mega caps and all at the expense of the medium sizedcompanies that occupy the FTSE Mid-250 index. Valuations in the latter area seemed to be running ahead of events,buoyed by merger and acquisition activity by private equity. Nowprivate equity finance is looking less attractive as interest rateshead higher. Plus it seems only a matter of time before an earlier dealgoes pop (and mid ...

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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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