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Top tippers plump for rising Chinese shares.

Byline: Nevill Boyd Maunsell Economics Editor

It was a year when British industry found it increasingly hard to beat anything made in China - and all but three of the Birmingham stockbrokers who entered our mid-winter share-tipping exercise were left trailing behind those who backed shares with a Chinese theme.

It was also a year when penny shares threw off the brightest sparks.

Even after the stock market's surge this autumn the 100-share Footsie and the All-share both ended up less than ten per cent higher than they started.

Even the small Cap index was only 12 per cent to the good over the year to Christmas Eve, the starting and finishing point for our purposes.

Curiously, the 'Midland Brokers' Index' compiled from entries by David Shaw of Gerrard, who has nobly tracked them all yet again on his computer, comes out remarkably close to the mainstream indices, though still short of them all, with an average gain of 6.5 per cent. We have had more glorious years.

For the record, of the 94 contenders (including four lacklustre offerings from The Birmingham Post) 34 beat the Small Cap index, 39 the Footsie-100, and 49 came through with a profit.

Just one, who shall be nameless, picked a company that went bust. His tip was Mayflower.

The outright winner by a devastating margin was Arden Partners' WILL ORGEE. He spotted that this was the year when CYC Holdings could acquire an investment following of its own as it brought Chinese companies to the market in Britain.

Being a penny share - indeed less than a penny share at the outset - that recognition brought the kind of reward in percentage terms that followers of penny shares dream about - a profit of 400 per cent.

NICK HALL at Harris Allday and Fyshe Horton Finney's DAVID GILBERT followed, both with Fortune Oil, another China play, and, indeed, penny share. Like CYC, Fortune, a supplier of jet fuel and other oil products to South China, provided a direct stake in the Chinese boom. Nick liked the chart of the share price as well a Fortune's commercial prospects. Their profit was 131 per cent, formidable in a year like this.

The fourth place brings a reminder that STUART RAVEN, a former winner of this competition, died suddenly at the age of 56 last January.

Stuart, who represented Fyshe Horton Finney in Northampton, continued to champion his winning choice, the video-phone company Motion Media until this year when he switched to a small African mining share Mano River Resources . He did so with a characteristic warning that it was 'highly speculative'. And so it proved. Starting at 61/1p the shares powered ahead to 17p, but were back at 103/4p in Christmas Eve. Still, that was a 65 per cent gain.

Next came yet another entrant from Fyshe Horton, reinforcing that firm's remarkable success in this exercise over the years. MATTHEW GARDINER correctly identified Royal Doulton as a potential bid target. He had to wait till October for Waterford Wedgwood to make its move, but that still delivered a 61 per cent profit.

A little way behind him, with 57 per cent from Cambridge Antibody Technology came OLIVER DE GIORGIO-MILLER at WH Ireland.

JEREMY HARBEN at Gerrard followed, finishing very strongly last week to end up with a 56 per cent profit from the AIM-listed emerging oil company Hardman Resources.

Next came Arden Partners' JONATHAN KEELING and ADAM MARTYN-SMITH at Harris Allday, both with 54 per cent from the Internet commercial property company First Property, Jonathan holding it for a second year.

Tenth place went to Tilney's CLIVE BULLOCK. He backed Medical House, a company specialising in a needle-free system for delivering insulin and other ingenious medical products. His profit was almost 52 per cent.

A percentage point behind, came Gerrard's GORDON HARVEY, who has won this event no fewer than three times. This year he picked a bio-materials outfit called Aortech to win him a fourth magnum, reckoning it was due for a re-rating. It got one, though not quite dramatic enough for Gordon's purposes. The shares ended the year almost 51 per cent to the good.

Next, with just under 50 per cent from Carillion were STEPHEN WILLIAMS at Williams de Broe and Gerrard's ADRIAN TAYLOR. They rightly saw the loss of rail maintenance contracts as no great disaster for the Wolverhampton company at a time when the Government was pumping money into health contracts. Stephen liked the prospect of special dividends as private finance initiative profits were passed on to shareholders.

ANDREW DOUGLAS at Williams de Broe spotted the potential in British gaming regulation for London Clubs International . Some of the shine has come off that recently as the Government back-tracked, but Andrew still banked winnings of almost 48 per cent.

That put him fractionally in front of JAMES HEATHCOCK at Gerrard who chose Securicor, merged with the Danish Group 4 Falck during the year to form Group 4 Securicor.

After him, we have DAVID SHAW, also at Gerrard, whose computer has once again kept track of everybody's entries. His share Alliance Unichem, chosen for old-fashioned 'good value' delivered a useful 46 per cent profit.

Any reader who followed Harris Allday's ANTHONY PHIPPS into Cradley, quoted nowadays on AIM, had a terrific run for their money. The share price nearly tripled at one point, then halved. But after a last-minute rally, that still left Anthony 36 per cent ahead.

Another contender from Harris Allday followed. DOMINIC CURRAN chose the structural steel company Severfield Rowen for its strong order book. The shares delivered a profit of almost 35 per cent

Just one point behind came Gerrard's TONY JOYNER with 33.7 per cent from the life and pensions specialist St James's Place and a hair's breadth advantage over Brewin Dolphin's IAN MOSELEY and Gerrard's TIM RYAN both with the hardware supplier Spirent.

GRAHAM OWENS, working nowadays as a consultant with Vartan & Sons, would have finished much higher up the list if he had abandoned his customary caution and plumped firmly for his first choice, the supermarket salad supplier Geest . It put in a 41 per cent performance.

Sadly, he coupled it with the speciality chemicals company Yule Catto . That made good money, too, but less so, and reduced Graham's averaged profit to 28.8 per cent.

That placed him narrowly in front of WILLIAM HUMPHREYS at Gerrard, who benefited from a late run by the shares of his choice, the bio-tech company Vernalis.

They finished the year with a 27.86 per cent profit, a whisker ahead of the 27.85 per cent gain by the aero-components maker Hampson Industries, the choice of another of our former winners, Brewin Dolphin's STEPHEN JONES. He backed it for its sure-footed managers and to benefit from a huge American order. Along the way, though, shareholders had to cope with a rights issue.

PAUL SMITH, yet another runner from Gerrard, looked for a year of economic recovery to benefit Hilton's hotels as well as Ladbroke. It did. He finished with a profit of nearly 25 per cent.

COLIN KETTLE at Harris Allday was the only contender to spot the potential of utilities in a year when dividends returned to fashion. National Grid Transco gave him a 23 per cent profit.

CHRIS MUSTIN at Gerrard gave no reason last Christmas for his choice of the sports goods retailer Tandem, but it still gave him a profit of almost 22 per cent.

Brewin Dolphin's ROGER SEDGWICK was one of the very few brokers this year to pick an engineering share. Bodycote International gave him a 19 per cent profit.

Tilney's DAVID GREEN opted for Cardpoint, an owner of hole-in-the-wall cash machines and one of the first to provide top-ups for mobile phones. The shares rose 19 per cent.

NICK READING at Hathaway Investment Management followed close behind with a little over 18 per cent from Scottish & Newcastle.

There was then a small gap to Harris Allday's LINSEY RUSSELL with a 14.44 per cent profit from. That gave her a fractional advantage over GRANT NOWELL-MITCHELL at Carr Sheppards Crosthwaite in Worcester and Arden's TREVOR NORRIS, who both suggested the accounting software heavyweight Sage. Profit: 14.29 per cent.

Next, JOHN MAYO at Morgan Stanley Quilter, with a 13 per cent gain from Legal & General.

Nobody else beat the Small-Cap index, though PETER HOLLINS, a two-time winner from Fyshe Horton Finney came close with just over 11 per cent from Bio Progress.

Gerrard's DAVID PENN ran him close with 10.9 per cent from Densitron and MIKE DAVIES, another entrant from Carr Sheppards Crosthwaite, made 10.3 per cent with the house-builder Wimpey.

But that is where the double-digit profits run out.

ADAM WILKINS at Brewin Dolphin and GEORGE O'CONNOR from Arbuthnot Securities both just beat the Footsie-100 with two very different communications outfits, BT and ITNET.

For the record, NICK WESTELL at Fyshe Horton, STEPHEN RAWLINSON, another contender from Arbuthnot, NICK SCANNELL at WH Ireland, GRAHAM ENGLEFIELD at Hathaway, Quilter's DAVID LOUDON, STEVE WRAGG at Harris Allday, NATHAN DARBY also at Quilter, CHRIS DRAYSEY at what is now OMX Securities Services, MIKE BROADHURST another at Quilter and Fyshe Horton's JONATHAN BROWN all made money.

Unhappily, that is more than can be said for the quartet from The Birmingham Post. MARTIN FAINT fared least badly with a 2.7 per cent loss on Prudential.

STEVE PAIN was 11 per cent shy with ISOFT.

NEVILL BOYD MAUNSELL badly mistook the state of affairs at Secure Trust and lost 32 per cent, while JOHN DUCKERS took a 40 per cent hit with Henderson Morley.

We can only wish ourselves better judgment next year.


Nick Hall is pictured at his offices Harris Allday in Margaret Street after being named runner-up in the Share Dealer of the Year competition Stuart Raven a former champion who died this year
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Publication:The Birmingham Post (England)
Date:Dec 30, 2004
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