Despite August being a peak holiday period and typically a quiet month for financial markets, this year proved to be an exception to the rule.

Recent developments in Russia have had far-reaching consequences on the rest of the world. President Yeltsin's decision to devalue the rouble and then sack his entire government left global stock markets reeling. This crisis combined with other factors, including a general slowdown in the Asian economy, served to undermine investor confidence across all the major money centres. August saw the Japanese yen plunge to an eight year low against the US dollar, while a sell-off of US securities throughout the month left Wall Street wobbling, suffering its third biggest points fall ever.

It was an uncertain month for all the world stock markets and London was a passenger on the roller coaster ride. During the month the FTSE-100 continued on its recent downward slid ending the month at 5368.50, a fall of 542.2 points on the previous month. In a similar fashion, the local Bradford Index closed down 9.01 points at 96.84.

Closer analysis of the UK economy reveals that a slowdown in growth has continued and mirrors the general decline in economic growth across the world. Manufacturing output remained weak with electronic, extractive industries and textiles being among the worst performing sectors.

The performance of company share prices in the Bradford index followed the downward movement of shares in general. while most share prices fell, four companies saw their values rise - John Foster and Filtronic showing significant increases of 29 percent and 17 percent respectively and Syltone and British Mohair rising slightly.

Shipley-based Filtronic, which makes components for mobile phone base stations and employs more than 1,000 employees in the UK, US and Australia, continued on its acquisition trail snapping up two companies during August. Litton Solid State, a division of the US defence electronics manufacturer Litton Systems, was acquired in a £26 million deal and will extend the company's capacity to make systems for the next generation of mobile phones. Only days later, it announced that it would buy Finland-based LK-Products, a Nokia subsidiary, for £58 million. Of this, £39.8 million will be payable in cash and the remainder will be made up from the issues of four million new shares.

Filtronic also released its full year figures which showed taxable profits up by a massive 168 percent to £11 million. Sales doubled to £94.1 million and average margins were maintained at 13.5 percent. Filtronic Comtek, the mobile telecommunications business which used to give its name to the whole group, increased operating profits by 170 percent to £11.1 million. With all this positive news, shares went through the ceiling and closed the month at 470 pence, up 67.5 pence.

At the beginning of August, Northowram structural steel company Wescol announced that it had won an £8.3 million contract for work on the expansion of Newcastle United's football ground. Later in the month the company issued a statement to try and reassure the market that it was comfortable with current trading and would not suffer from a slowdown in the construction market. The share price did not fare well and ended August at 32.5 pence, down 24 pence.

Other company news included engineering group FKI which sold two parts of its business in a bid to reduce its short term borrowings and concentrate on its three core businesses - hardware, engineering and materials handling. Acco Systems of Warren, Michigan, which supplies conveyor systems to the major US car manufacturers, was sold to Durr Inc for £13.7 million and Huwood International was bought by Continental Conveyor for £2.2 million. The share price fell by 23.5 pence to 141 pence.

Bradford's best performers

1. John Foster

2. Filtronic

3. Syltone

4. British Mohair

5. John Haggas

6. Bradford Property Trust

7. S Jerome

8. Peter Black

9. Ellis & Everard

10. Drummond Group

Compiled using the percentage change in share price between July and August 1998

David Hartley is a partner at KPMG, Bradford.

Converted for the new archive on 30 June 2000. Some images and formatting may have been lost in the conversion.