Cool reception is the right one for debutant Investec

Man U is off target on price; Topps Tiles looks tops for value

Welcome to London. Investec's shares started trading here yesterday, immediately falling below their 830p listing price, succumbing to the market malaise which has led others to pull their floats. The size of the fund-raising that accompanied the financial services group's move from Johannesburg to London was just £33m, way below the £100m originally planned.

And Investec debuted just days after an embarrassing sex discrimination hearing that prompted plenty of disparaging comments about the quality of its research from clients and former employees. Investec might be cleared of discriminating against Louise Barton, a media analyst, when the result is announced later this summer, but it won't easily be cleaned of the mud that has been thrown in the legal process.

Things are tough enough already. The slump in investment banking activity in the UK is plain to see, with Investec among those to have laid off staff. Private client stockbroking has declined, and other specialised finance business is poor. In these markets, asset management must also be under pressure.

So the short-term outlook is not good. At least the share price reflects that. The stock trades on earnings multiples lower than those of international peers because South Africa is an "emerging market", keeping mainstream investors away. At 827.5p, it is on a March 2003 price-earnings ratio of less than 7. That number should move north now it has a London base, and optimists hope its inclusion in the FTSE All-Share in September will be a catalyst.

Perhaps it will take longer. A string of acquisitions means half of Investec's business is now outside South Africa, where the greatest political risks lie. But these acquisitions have not been wholly successful, and the US businesses in particular require some tender loving care. Add to that the fact that global stock market falls are putting the frighteners on Investec's private investor clients, and the stock does not look attractive.

Man U is off target on price

There is only one football club in the stock market Premiership, and there are no cups for guessing which. Manchester United was the only club likely to relieve Leeds United of Rio Ferdinand, whose World Cup defending turned him into a £30m hot property.

But even Manchester United shares are not worth buying. Its shareholders will have little time to appreciate the coup before they have to start depreciating the new asset. Written off over the lifetime of the contract, Ferdinand will lop more than £7m from the company's profits for each of the next four years. That's why the shares fell 10p to 108p yesterday, even before there is word of the new player's personal terms, which are unlikely to be modest.

There are a few grounds for hoping that player wages could be brought back, if not to earth, at least into its orbit. ITV Digital's bouncing cheque for the Nationwide League has prompted a serious rethink of player wages at the margins of the Premiership. And the European superclubs are groping for a gentlemen's agreement to limit salary bills – though they must tread carefully if they are to avoid being branded a cartel. The benefits still look some way off, and may not materialise if the £30m pay-out to Leeds and the demands of the fans spark another money-go-round.

Leeds United's soaring debts make it a stock market no-go zone, despite the bounce since Terry Venables' appointment and despite rising 0.25p to 7.5p yesterday. The next TV rights deal, due in the spring, is not expected to be as generous as the last and the company is spending funds on a new stadium.

Manchester United, with its string of sponsorship deals and the prospect of more from revenues from overseas TV, is in better shape, but revenues could be flat this year as European games are cut back. Its shares, on more than 20 times next year's likely earnings, are still overpriced. It seems the only way to get rich from football is to play it.

Topps Tiles looks tops for value

Tiles are the new carpets. From hallways to conservatories, cloakrooms to toilets, floor coverings are becoming harder as eager DIY-ers ape their Continental counterparts and choose tiles to replace shagpiles across Britain. This trend helped Topps Tiles to report strong results yesterday for the fifth year since floating.

The group, which also sells trendy laminated wood flooring, dominates the UK tile scene from its chain of 171 stores. It sees scope to double the number of outlets by 2006 and is also testing sales of upmarket tiles to compete with Fired Earth.

There was an 11.3 per cent spurt in sales in the year to 1 June, and that has continued since, notwithstanding sofa-prone husbands during the World Cup and a fortnight of sunny weather. Pre-tax profits in the year just ended rose 22 per to £11.5m.

Not content with selling more to Britons – who must surely be the last nation still to carpet their loos – Topps is testing the water in the Netherlands via a joint venture with a Dutch flooring company. This could lead to similar deals elsewhere in Europe. At home, Topps has recovered from a failed experiment in MFI by persuading carpet guru Lord Harris to sell tiles in his Harris Carpets stores.

Topps also upped its dividend by 43 per cent, bringing its dividend cover into line with its peers. The shares, up 0.5p to 235p, now yield 3 per cent and look good value.