City Comment: Kean Marden_6

Bleak days yet again for European stock markets. As we write, the FTSE100 has declined for nine consecutive days - a losing streak that has occurred on only six occasions during the past 30 years. The all-time record is 11 days, which may well have been broken by the time this column is published.
30 November 2011
Bleak days yet again for European stock markets. As we write, the FTSE100 has declined for nine consecutive days - a losing streak that has occurred on only six occasions during the past 30 years. The all-time record is 11 days, which may well have been broken by the time this column is published.

Faced with the uncertainty surrounding the European sovereign debt crisis many investors remain paralysed with indecision and have stopped trading. In common with the recruitment industry, depressed revenues require swift action, and redundancies in the banking and finance sector have accelerated materially over the past month or two.Against this backdrop it was interesting to read two conflicting surveys this month. According to the Association of Professional Staffing Companies (APSCo), demand for contractors has fallen by 13% year-on-year across the UK, with the banking & insurance hardest hit.

    'Faced with the uncertainty surrounding the European sovereign debt crisis many investors remain paralysed with indecision and have stopped trading. In common with the recruitment industry, depressed revenues require swift action, and redundancies in the banking and finance sector have accelerated materially over the past month or two'

However, a major UK recruiter suggested that the job market showed “signs of stabilising” in October, with IT performing the strongest and banking & insurance “making progress” (recruiter.co.uk, 17 November). A quick canvas of opinion with a few recruiters suggests more sympathy with APSCo’s position.

News from the recruitment sector has been thin on the ground over the past few weeks. At its Annual General Meeting, Matchtech noted that it was performing in line with the board’s expectations and continued to see opportunities in its core technical business.

Looking forward, Randstad will hold a two-day seminar with analysts in The Netherlands in early December and SThree will issue a year-end trading statement on 2 December. Thereafter, the run-in to Christmas is likely to be rather quiet.

On the subject of SThree, Russell Clements celebrated his25-year anniversary at the company a few weeks ago. Russ joined Computer Futures in 1986 to work alongside Bill Bottriell and Simon Arber as employee number four, and attracted their attention during a failed attempt to sell them advertising space in a magazine.

Had he accepted an offer to work in a left-wing bookstore six months earlier (rejected on the basis of the company car on offer), perhaps they would never have met. Two and a half decades later, SThree has more than 2,000 employees and operates in 15 countries. Happy anniversary, Russ.

Kean Marden, head of support services equity research, RBS Global Banking & Markets

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