Selling the industry short

What a difference 12 months can make. A year ago next week, shares in Punch Taverns were trading at 11 quid, those of Enterprise Inns at nearly £6.50. Greene King's stock was 23p shy of a tenner a pop. Last week, as these pages went to press, these shares were trading at £1.53, £1.79 and £4.63 respectively.

Shares in consumer-facing sectors have been 'heading south' in the last few months, as fears for the economy grow.

But is the market overdoing it? Are investors adopting a lemming-like mentality, as has been suggested in some quarters in the Square Mile? There does seem to have been a rush for the door when it comes to pubco stocks, but to what extent this is based on trading realities versus perceived issues to do with additional things like debt positions is unclear. A lot of both, I imagine.

The market is very nervous, with ominous predictions about trading fuelling short-selling activity.

There has been short-selling of some pubcos, notably Punch, where investors legally but somewhat questionably take a punt on the fact that they reckon values will continue to fall. Recently this has been a self-fulfilling prophecy for such players, and a very profitable one.

But does it bend the market out of shape? Yes, to an extent, although that's not to say there aren't concerns about how some of the listed groups are faring. Regionals such as Greene King and Marston's have traditionally shown a paternalistic attitude to their lessees and tenants. While supportive of those who show willing, the Punchs and Enterprises of this world are unlikely to stretch quite that far.

It's not all bad news though. Last week I spoke to a couple running a highly successful pub in a small village in the North East. Rushed off their feet, they were.

Running a pub that delivers to its customers - in spades in this outlet's case - is one way of riding out the storm, it seems.