2010年8月31日星期二

Do stockmarket Cinderellas point to fairytale solution to bust Britain?

Do stockmarket Cinderellas point to fairytale solution to bust Britain?

It's easy to see why a fog of futility descends upon radicals as public sector deficits get bigger by billions every month and demand for state handouts and help never stops growing. "What's the point?" they cry when faced with recidivist spendthrifts on both sides of the House of Commons.

But stockmarket evidence would suggest things are changing in the way public services are run and that the pace of that change will increase in future, forced if nothing else, by the simple fact that state coffers are bust.

The clue is in the rise of the support services sector – a group of companies that have long been the stockmarket's Cinderella – and now has seven members in the FTSE 100.

One of those, Serco, which entered the blue-chip index at the beginning of the year, reported half-year results on Wednesday. The 6pc rise in its shares sent them to 482p and within sight of their last bull market high of 514p which they hit in early May 2007, just before the credit crunch. But it's the credit crunch and ensuing recession that are providing the momentum behind Serco and its peers.

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