Time for a bit of pawn, Peel Hunt advises

As stock tips go, it's not one to inspire confidence in the wider economy.

Today, City firm Peel Hunt said investors would do well to pile into shares in pawnbrokers.

Peel's analyst Nick Batram says such firms have done well from tough economic times but have much further to grow.

In a note headed "A rich vein still to be mined", Batram says: "UK pawnbrokers have derived exceptional profits from the rapid rise in the gold price over the past three years.

"However, both Albermarle & Bond and H&T are reinvesting the 'gold dividend' into accelerating the roll-out of their retail estates."

He adds: "The pawnbroking opportunity remains an exciting one for investors." Pawnbrokers will grow profits from unsecured lending, he believes, and could benefit from a regulatory clampdown on other providers of such loans.

A&B shares were up 2.3p to 336.9p today.
H&T shares gained 2p to 340p.