Charles Stanley plunges on warning

Charles Stanley, the investment banking tiddler and provincial stockbroker, joined its larger Wall Street rivals yesterday by issuing a profits warning which it blamed on the equity market downturn. Its shares plunged 21 per cent.

The company said profits for the first-half of the year would be 20 per cent lower than market expectations, at £4m. In the same period during 2000, pre-tax profits were £7.2m.

"At this stage, given the continued uncertainty in the markets it is extremely difficult to forecast the outcome for the second-half," said Peter Hurst, the finance director.

Mr Hurst said the company was financed in excess of regulatory requirements to the tune of £20m in cash. In its full-year results statement in June, the groupwas well placed to weather any downturn and its "overall assessment was "positive".

Charles Stanley's is the latest in a series of warnings from large and small brokerages both here and overseas. The latest appraisal of the severity of the downturn in investment banking came yesterday from Thomson Financial, which said global merger and acquisition activity in the third-quarter had fallen 45 per cent year-on-year, and 1.5 per cent on the previous quarter. Total M&A value is $1,400bn (£958m) down from its levels at the same point in 2000.

In the UK, Lazards top the nine-month investment banking tables for completed deals, while Dresdner Kleinwort Wasserstein leads in deals announced. In Europe, Goldman Sachs ranks number one in deals both announced and completed.