Shares and the markets

Working Lunch regular and co-founder of 7 Investment Management Justin Urquhart Stewart answers questions about brokers, the FTSE, shares and plenty more.

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David Walker wants to know why analysts' views differ so much. Surely if they did their research properly they'd come to the same conclusions, he says.

Be careful - some of the brokers are paid for by the companies.

They're hardly going to highlight the difficulties of their employer. You've got institutional brokers as well who are sometimes making recommendations to their sales team so you've got to be very careful. Check the source of the research and also how old it is.

Mike Williams asks if the FTSE will ever climb again. It's been bumping along for a couple of years now.

Yes, it will. If we see the American economy pick up by the end of 2001, then I expect to see the US market and our market go as well.

Dan works for Vodafone and as a perk he can enter a buy-one-get-one-free share scheme. But, he says, telecoms are rubbish - should he just put his money in an Isa instead?

He's right, says Justin. The telecoms sector has done very badly indeed. But Vodafone is a cracking good company.

Its shares are frankly pretty cheap if he's got the opportunity of buying one and getting one free. These employee share ownership schemes are really very good value.

What's the difference between scrip issues and drips?

A drip is merely a dividend reinvestment programme, so instead of getting your dividend in cash you can sign up with a company and they will reinvest them in the company's shares.

But be careful - you pay commission and stamp duty on it.

A scrip dividend - scrip's just another word for share - means you're getting the shares, so instead of buying them you're being allocated them. You pay tax on those, too.

Some shareholders in AWG - what used to be Anglian Water - have been getting redeemable shares instead of a dividend. What are they and are they worth keeping?

As the name implies, you can redeem them and you get the money back.

They are given out instead of a dividend. The reason they do it is because of a rather complicated advanced corporation tax issue that the company's got itself into.

So they give you hundreds of these shares and they pay you a dividend, or interest, every six months. It's not a very good rate of interest and you can only sell them every six months.

Frankly the best thing to do is sell them and put the money in a decent deposit account.

Thirteen-year-old Jonathan from Hull asks how old he has to be to own shares in his own right.

You have to be an adult, at least 18, to hold shares in your own name. But your parents can buy them on an account in your name. Bear in mind that a child has a tax limit as well, so you can make full use of that.

Martin in Cannock bought Orange shares at a discount. They haven't done very well - should he sell or hold?

Having bought them, he might as well hang on to them. They will come back - and he bought them at a discount anyway. But I'm afraid that will take some time, at least a year.

Steve Carpenter has heard about T5 changing to T3. What's all that about?

It's a form of settlement in the stock market.

If you've got stock either in Crest or in nominees with a broker, they will settle in three days instead of five days. However, if you've still got a share certificate you are likely to settle within two weeks, or 10 working days.

So T3 is a three-day settlement period.

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The opinions expressed are Justin's, not the programme's. The answers are not intended to be definitive and should be used for guidance only. Always seek professional advice for your own particular situation.