THE head of one of Scotland's leading brokers and fund managers warned yesterday that market conditions were the toughest since the early 1970s.
Jamie Matheson, executive chairman of Brewin Dolphin, said flotation activity had virtually "dried up", as had rights issues.
Matheson's comments came as Brewin Dolphin, which trades as Bell Lawrie in Scotland, posted a 4.9 per cent rise in inter
im pre-tax profits to £21.8 million (from £20.8m).
Brewin said its investment banking arm had experienced quieter trading in "very tough market conditions" in the six months to end-March 2008.
As a result, investment banking profits more than halved to £1.1m (£2.5m), on total income down to £7.6m from £11.4m. Matheson said he did not expect much uplift in the flotations market in the second half of this year, but would be "disappointed" if things did not pick up in 2009.
The last company Brewin brought to the market was property and construction consultant Cyril Sweett in October 2007.
Matheson warned: "Clearly, the next few months will continue to be affected by unsettled financial markets across the globe."
On the general business climate, Matheson said: "These results have been achieved against a market background more challenging than at any time since the early 1970s."
He added: "Given the conditions, some of our peers might be envious of our performance. I started (in broking] in the 1970s.
"We had soaring oil prices then and we have that now. We had bank refinancings then (the secondary banking crisis forced Bank of England intervention] and we have these now."
However, he also said there were differences between the current climate and the 1970s.
"There was a very different political outlook then, with the three-day week (under Edward Heath] etc. Now the political climate is comparatively benign."
Matheson said he still believed Brewin was on course for a "creditable" year.
Total income at the halfway stage rose 6 per cent to £104m (£98m), while discretionary funds under management fell 2.8 per cent to £10.4 billion.
Profits at the discretionary fund management business lifted nearly 23 per cent to £11m (£9m). Profit from Brewin's advisory business was flat at £6.6m.
Shareholders get a 5.2 per cent rise in the dividend to 3.55p against 3.375p in October 2007.
Matheson said Brewin, which has around 1,700 staff, was confident in its long-term prospects and would continue to pursue "judicious growth".
"We would be loath to pass by good opportunities to expand even in this climate. Shareholders expect us to take a long-term view," Matheson said.
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The full article contains 452 words and appears in The Scotsman newspaper.
