NUM.L Share News (NUM)

(ShareCast News) - Panmure Gordon has a tough road ahead of it, the Financial Times´s Lex column believes.The pool of banking fees which the UK´s small stockbrokers and investment banks can opt for is simply not large enough to sustain all of them given the decline in broking margins.About £5.4bn was raised on the Alternative Investment market in 2015m putting the fee poll at somewhere around £200m, Lex said.Indeed, Panmure Gordon´s full-year revenues in 2015 were £3.5m less than its operating expenses.Although the broker has kept a lid on costs, trading at its capital markets business worsened considerably.Unfortunately, managament does not have the option of taxing an axe to pay-related expenses.Well-connected bankers and a sturdy reasearch and distribution operation are key to bringing in business.That does not mean the model can´t work, as Numis´s latest set of figures showed, but it has four times the amount of revenues, Lex pointed out. The 3.0% surcharge on stamp duty on those purchasing homes to rent them will not dent Grainger´s business model, The Daily Telegraph´s Questor said.With lending becoming stricter and given the shortage of affordable housing, some predict that private renters will outnumber homeowners within a decade and the company is planning to capitalise on that trend, the tipster explained.It has already announced it will spend £850m to build and purchase UK rental properties over the next four years and is simplifying its operations.In January it hived off its UK equity-release unit and later sold a £94m loss-making portfolio of German properties.Those divestments will lead to a plunge in revenues next year, due to the property-owner´s smaller size, but pre-tax profits are seen jumping by 8% over the 12 months ending in October. However, at a 22% discount to its net asset value the share price suggests the Newcastle-based outfit´s promising new strategy has yet to be priced-in.Grainger will also benefit from a government-backed incentive to build rental homes, by issuing companies loans covering half the costs of new developments.Given that it invests at the low end of the market also means the outfit is likely to be sheltered from the worst effects of a housing slump, should it occur.Hence, its discounted shares are likely to drive a higher return and dividend yield.'Buy', said Questor.