Bear market in brokers
THE stock market price that has really taken a tumble is the price of stock market firms. It does not show up, as a rule, because the shares are not quoted, but now we have an indicator. I was saying last week that Paribas, the French bank, must have taken an eight-figure loss on its investment in the brokers Quilter Goodi- son. The figures have not been disclosed, but I now understand that the price Paribas paid for Quilter two and a half years ago was £28 million. Paribas is selling Quilter's private-client and portfolio management business for its net asset value. Again, the figure has not been disclosed, but estimates have ranged from £5 million to £9 million, which I should have thought high for a business which in its nature does not need many assets. The remainder of Quitter corporate finance and institutional busi- ness — will be taken into Paribas, but cannot come close to bridging the gap between Paribas' buying and selling prices. An eight-figure loss looks conservative.