YP75: Markets weaken as investors see gloom in global economy

Ratings agency Moody's announced that it had placed Spanish government debt under review for a possible downgrade with one of the reasons being the country's deteriorating short term and long term economic growth prospects. It appears likely that Spain's debt will now be downgraded from its current Aaa level as the country struggles to cut its sizeable budget deficit. Poor manufacturing data from China through the week only compounded the market's pain and added to fears of a slowdown in Chinese growth.

Cosalt, a leading provider of marine safety products for the oil and gas markets, reported a pre-tax loss of 1.5m for the half year ended May 2, compared with a loss of 3.4m the previous year. Revenue also fell about nine per cent from 52.8m to 48.3m over the same period. On a more positive note, an improvement in asset values has seen the group's pension scheme deficit cut by 1m to 10.5m and management remain hopeful this can be reduced further. In addition, the company has announced it is in early talks with Denmark's Vestas Wind Systems and Germany's Siemens AG over potential opportunities in the offshore wind sector. The company are hopeful that skills required in the offshore energy sector will be transferable to the offshore wind sector and in turn provide the company with attractive opportunities to develop the business. The Grimsby based company have suffered from a difficult trading environment in recent times however with management continuing to cut costs and a number of new contracts under their belt, the group appear to be making progress.

CPP Group, the international card and identity theft protection company, have stated they anticipate group revenue will have grown year on year in line with management expectations. The York-based company which provides customer assistance during stressful times, says the majority of revenue growth is from northern Europe through growth in areas such as its Identity Protection business. The group are seeing strong progress from its recently launched markets including India, Mexico and Turkey, and as result management remain confident going into the second half of the year.

Elsewhere, coal company ATH Resources reinstated its dividend in spite of reporting a pre-tax loss of 2.1m for the six months of the fiscal year due to production problems. However, the Doncaster based company are confident production should be back on track during the second half of the year having suffered from the poor weather at the start of

the year.

The group which is involved in the operation of surface coal mines has also announced that it had received an approach to purchase its land regeneration business. The land regeneration business recovers remaining coal from old coal mines before the land is tidied up for sale or development. Chief executive Tom Allchurch has not named the suitor. However, he has stated the company is considering the approach.

Edward Marsden, Assistant Investment Manager at Brewin Dolphin, Leeds