The Week ahead: Turnaround on small investors

THE Stock Exchange can be a baffling, contradictory organisation. In recent years it has made life increasingly difficult for small investors. Now it intends to spend pounds 1m encouraging private individuals to entrust at least some of their wealth to the stock market.

The decision to woo the small investor with a Share Aware campaign stems from the 1996 Weinberg Committee on share ownership which revealed a lack of understanding of the benefits of investing in shares.

Many will regard the campaign as a change of heart. There is, rightly or wrongly, a strong impression that the City is not remotely interested in the welfare, or otherwise, of the small player.

Many leading stockbrokers and market makers are prepared to say, privately of course, that the general attitude from the Stock Exchange Tower, which is heavily influenced by the major investment houses, is that private shareholders are more trouble than they are worth.

Perhaps this interpretation is unfair. But many of the measures the Stock Exchange has introduced in recent years favour the institutional investor and disadvantage the small shareholder.

Big players provide the lion's share of its business.But the small investor is a vital constituent, often supplying the seed corn, of any share owning democracy. And, of course, they generate most of the individual trades, albeit relatively small in cash terms, which are recorded, providing livelihoods for most of the smaller private client stockbroking firms as well as execution only stockbrokers and, indirectly, income for some major market firms.

The last Tory Government tried to encourage the small investor with a string of privatisations; then came the demutualisations and, judging from Chancellor Gordon Brown's plans, even New Labour may have a soft spot for the little player.

However, the Stock Exchange's campaign to encourage the small investor has already run into flak with some suggesting the "hot cakes" theme supports speculation rather than long term investment. And pounds 1m pales against the relentless advertising outlay by Nasdaq in this country. There is a theory the small investor would have been better served if the pounds 1m being splashed on the campaign had been devoted to looking after their interests in the market, perhaps examining ways of moving towards a two tier market - one for the big boys, the other designed to be more accommodating to the little'uns.

A thin reporting list this week is headed by British Steel, a casualty of the strong pound. Year's profits are likely to be down from pounds 433m to around pounds 270m.

Engineer FKI should manage a 12 month out-turn of pounds 127.5m, up from pounds 112.1m, and Sercuricor may produce first half profits of pounds 45m against pounds 48m. Securicor's shares have been strong with corporate activity the major influence. It is widely suspected the group will surrender its minority shareholding in the Cellnet mobile telephone operation to BT which has 60 per cent. Such a deal could transform Securicor.

Hazlewood Foods, likely to offer a year's out turn of pounds 42m against pounds 37m, is another where investors are peering beyond the trading performance. Since Unigate walked away from Hillsdown Holdings there has been speculation it may turn its attention to Hazlewood.

Robert Wiseman Dairies, an acquisitive group with a robust profits record, should deliver year's figures of pounds 17.5m against pounds 12.2m.