York-based Persimmon, the UK's largest homebuilder, confounded the pessimists last week, with a seven per cent increase in half-year pre-tax profits.

So much for the difficult housing market. The group did well to hold on to its margins, with the lift coming from increased sales. This is despite astute buyers being able to haggle on buying incentives, something that was not even considered two years ago at the height of the property market rally.

The premium upmarket Charles Church division has been selling in Ingleby Barwick, near Stockton. Although Charles Church prices can range up to £2m, depending on the area, the national average selling price last year was £254,810.

Some believe that Persimmon is named after the sweet, red tropical fruit, but the name actually derives from the horse that won the 1896 Derby and St Leger for Edward VII, Prince of Wales.

A horse analogy is appropriate, as the galloping share price means that the company is coming up fast on the rails for inclusion in the FTSE 100 list of top companies. The FTSE Equity Indices Committee holds its next quarterly review next week, and should Persimmon's market capitalisation be deemed large enough, it will join the UK's premier league of quoted companies. This would be some achievement for a company in its 20th year of listing on the London Stock Exchange.

It's party-on for one such new entrant. Party Gaming is very short odds to be at the top of the list of potential new boys. The online poker operator came to the market in late June. Its market capitalisation makes it bigger than Sainsbury's, and it made more money than Sainsbury last year.

There is some dispute whether the company operates legally, as US punters are not allowed to gamble online. The bulk of Party Gaming's customers are from the US though, with the company operating from Gibraltar, and hence the transactions take place outside US jurisdiction.

(The child in me feels the need to point out that the co-founder and largest shareholder is called Anurag Dikshit).

The successful flotation on the UK stock market has prompted 888.com, the high profile online casino sponsor of Middlesbrough FC, to consider a listing. In a similar style, the existing shares are tightly held by two controlling families, and would provide the founders with a certain jackpot.

The market has softened during the past fortnight from an over-bought position. Very often, when something is too good to be true, it proves not to be. Share prices have moved too high, too fast, so a degree of retrenchment was perhaps inevitable.

The FTSE 100 is up more than nine per cent since the start of the year, above most predictions made nine months ago. Remember that this increase reflects only capital growth, and does not take into account dividends paid. Throw the latter into the mix, and returns are averaging about 12 per cent this year. That compares very favourably with lower risk cash deposits and bond investments.

It may be the case that markets trade in a sideways direction over the next couple of months. The key factor may be interest rates. Further reductions are possible, but may only coincide with the next inflation report in November.

- For investment advice contact Anthony Platts on 01642 608855.

- Ian Pluves is a director of Wise Speke. Views expressed are the author's own and are not necessarily held throughout the Brewin Dolphin Group. Wise Speke is a division of Brewin Dolphin Securities Ltd, a member of the London Stock Exhange, authorised and regulated by the Financial Services Authority. Prices, values or income may fall against investor's interests. You should therefore be aware that you may get less back than you invested. Investments may not always be suitable for all individuals. If you have any doubts, you should consut a professional advisor.

Published: ??/??/2004