Proudfoot, the worldwide management consultancy group, saw its shares slide yesterday after it warned that profits in the rest of the year would be below the first-half level. We are very clear by what we mean by corporate finance,” Mr Kent said.. “This is a core area for us,” Mr Kent said.Unlike many other banks, Close Brothers does not intend to expand its corporate finance business to offer a whole range of products to its clients.”What we are is purely independent We do not lend to the companies we advise. Asset finance made 45 per cent of group profits, and the remaining 20 per cent came from traditional merchant banking.”Overall, all of the areas of business have done well,” added Mr Kent, who wants the bank to increase its “fee earning business” over the coming years, particularly in corporate finance and investment management.Close Brothers’ investment management business is specialist, offering products such as risk-protected index unit trusts.Mr Kent said the bank had no intention to expand into more mainstream market products such as unit trusts, but would consider acquisitions in investment management.Brisk business in mergers and acquisitions is fuelling profits at most merchant banks, but Mr Kent said Close Brothers’ plans to build its expertise in this area were not based on this year’s hectic market.

Close Brothers said it had not suffered from a wave of client and staff defections at HSCF which are all too common following takeovers involving City firms.
Asset finance and the Winterflood market-making business were the main drivers of the growth in profits, which was accompanied by a 17 per cent rise in total dividends to 10p per share. Close Brothers’ shares advanced by 3.5p to 343.5p.Rod Kent, managing director of Close Brothers, said, Winterflood had a “fabulous year” and had a good market position in its specialist area of small stocks.Winterflood, which makes markets in all of the 210 companies on the Alternative Investment Market, increased its share of Close Brothers’ total profits from 22 to 35 per cent. . Hilton Hotels is paying Prudential Insurance $267m to buy most of the 50 per cent stake it does not already own in four Hilton hotels in New York City and Washington DC. Close Brothers, the merchant banking group, yesterday reported record full-year results, and hinted that it would expand its investment management business through acquisitions. The 33 per cent rise in pre-tax profits to slightly more than pounds 45m in the year to 31 July was the 21st successive annual increase, and included only a negligible contribution from the Hill Samuel Corporate Finance (HSCF) business bought in May.

Look for the support of good cash flow and ride the momentum of shares that are already outperforming the market. Most important, stop worrying about the market which will continue to fluctuate, boy, fluctuate.. Apart from the sheer impossibility of timing moves that well, the cost of bouncing in and out of shares makes the exercise largely counter-productive.After the cost of commission on the way in, the effect of the bid-offer spread and the price of selling again, a share has to appreciate by at least 5 per cent, and often by much more, just to wash its face. Sensible investors, such as the American tax inspector who retired in 1945 with $5,000 and died last year with $22m, buy and sell shares as infrequently as they can.The trick in jittery markets like these is not to panic: continue to buy shares in genuine growth companies with low ratings relative to their high and sustainable earnings growth rates. Catching the peaks and troughs is beyond even the best-paid fund managers For other investors it is a futile strategy. For the long-term investor, whether to be in or out of equities is an idle question.The bearish stance being taken by Tony Dye of PDFM may well be borne out in the long run But that is of little relevance to small investors. It is a statistic that should be remembered while reading the panicky gloom-mongering currently masquerading as market commentary.

Implicit in his quip was the message that in the long run it doesn’t matter – he would have lost no sleep over yesterday’s 44-point fall in the All Share.Since 1919, a time period long enough for even the most persistent statistical blips to be ironed out, shares have outperformed other financial instruments by such a wide margin that it is a wonder that anyone bothers investing in any other asset.The real return of 8 per cent for shares compared to under 2 per cent for gilts represents a mind-boggling difference when compounded year after year for more than three quarters of a century. Economy of thought was not, however, in much evidence in yesterday’s outpourings. The Task Force might be committed to cutting down on paperwork but it still took four press releases and two glossy reports yesterday to spell out what it is up to.No need for small investors to panicAsked what he thought the market would do that day, JP Morgan once said: “It will fluctuate, boy, it will fluctuate.” He meant that neither he nor anyone else could hope to know where the market was headed in the short term. Thus, instead of having detailed regulations on the safety of industrial machinery, insurance companies would be left to set standards through the policies they devise and the premiums they charge.It must have occurred to someone at the Task Force that this might lead to bigger premiums.