Cattles on a slope triggers TD investors interest

Angus Rigby, Chief Executive Officer, TD Waterhouse comments: "The new year has opened with balanced trading activity, with buys representing 47% and sells 53% of our customers' top trades this week.

"Sub-prime lender, Cattles seems to have captured our investors' interest, being the most traded shares this week at second place in our top ten buys and number seven in our sells table. The West Yorkshire-based company, which entered the ‘90% Club' right before Christmas last year - a membership earned by companies whose share value is worth just 10% of their peak value over the last three years - experienced a drastic drop in share price the week before Christmas, hitting a 23-year low. No doubt this followed Merrill Lynch cutting Cattles' price target by more than 60% in addition to a previous negative note by Citigroup. Both banks worry that Cattles risks breaching its banking covenants due to its clients falling behind on their payments and also by failing to secure a retail deposit taking license from the Financial Service Authority.

"Yesterday, Cattles explained the application for a banking license continues to be the topic of constructive discussion with the City Watchdog. If the grant is obtained Chief Executive David Postings hopes to secure about £1 billion in deposits by 2010 - a much needed cash injection for the company and vital support for its balance sheet. In an effort to cut costs, Cattles has also decided to reduce its workforce by 20%, cutting some 1,000 jobs, to conserve liquidity. In the last week, the company saw its share value propelled by 50% and our trading customers have been seeking to profit from this volatility making the stock a popular choice.

"In this cold winter our customers saw a hot deal with coal mine developer GCM Resources, whose shares have been snapped up, making the company a new entry at number five of our top ten buys. AIM-listed GCM Resources, whose portfolio of investments includes South Africa and China coal businesses, and uranium interests in West Africa, Sweden and Australia, has been experiencing phenomenal growth in share price this week, with the stock up 98% (and up 170% in the last month).

"Recent elections in Bangladesh at the end of December have been seen by analysts as favourable for GCM's operations in the region, a less politically volatile area, rich with coal reserves - an alternative to other energy sources. Just a few days before polls opened the company declared it was ‘looking forward to working with the newly elected government of Bangladesh to move the Phulbari Project forward'.

"On the back of GCM Resources share performance, TD Waterhouse's customers have also been buying shares of another coal exploration company, South African-based Polo Resourcing. The AIM-listed coal miner owns a stake in GCM Resources, a ‘sizeable strategic investment' according to its latest annual report. TD investors zealous trading of the stock has placed the company in ninth place of this week's top ten.

"Finally, troubled retailer JJB Sports has entered our top ten buys in seventh place this week, with its share value jumping by over 200% over the past seven days on the back of last week's management shake-up, which saw David Jones and Peter Williams, the ex-CEOs of Next and Selfridges, appointed as executive chairman and head of strategy respectively. Seen by experts as a move that could revive the firm's fortunes, the company shares have encountered the favour of our investors, who have been snapping up the sportswear retailer's stock, taking advantage of recent volatility."