YP 75: A boost for markets as British banks pass the stress test

Seven out of 91 banks stressed tested by the European Union failed, with five of those being Spanish banks. All the British banks passed.

The results provided further support for the markets, but many experts are now questioning the credibility of the tests and believe they were no more than a political tool as no account was taken for the possibility of sovereign default.

While this may be the case, it's difficult to question the outstanding UK GDP figures released on Friday which showed 1.1 per cent growth in the second quarter – more than twice the expansion economists had expected and the strongest quarter since 2006.

The news has helped dismiss fears over a double dip for the time being and raised the prospect of an earlier-than-expected interest rate rise.

Engineering group Fenner kicked off the week with a confident statement over its outlook following a third-quarter boost to US sales.

The Hessle-based company, which distributes conveyor belting and reinforced precision polymer products, has seen the recovery in the US industrial markets help drive sales of seals and hydraulics. This has led to an improvement in revenues and profits from the previous year.

In addition, the group's advanced engineered products unit exceeded expectations, due partly to the restocking of supply chains.

The company continues to search for acquisitions having recently bought Tuscon, the Arizona-based company that makes parts for medical devices. The medical business is an area the company is keen to target and expand into in order to take advantage of the rapidly-growing minimally invasive surgery market.

The troubles continue to mount for the home shopping and educational supplies company Findel following the announcement of a widened full-year loss, due mainly to poor trading at its Education Supplies business.

The company, which is based in Burley-in-Wharfedale, said it does not expect to declare a dividend in the current financial year as cash will be used to ease the group's debt burden combined with investment in operations.

To compound the company's difficulties, the previous discovery of unsubstantiated accounting entries in its Education Supplies division has forced the group to cut its pre-tax profit result for fiscal 2009 and prompted a "full potential review" of the business.

Elsewhere, Leeds-based lender International Personal Finance announced a surge in pre-tax profit to 36.9m from 12.4m for the six months to June 30 compared with last year. The company has also increased its interim dividend by 10 per cent.

Edward RH Marsden Assistant Investment Manager at Brewin Dolphin, Leeds.