STOCKS NEWS EUROPE-Credit crunch boosts pawnbrokers

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12:21GMT 13March2009-Scarcity of credit boosts pawnbrokers

---------------------------------------------------------- The scarcity of credit may be choking demand and exacerbating an already severe downturn, but it is adding to the attraction of the archetypal recession-proof businesses -- pawnbroking, says Daniel Stewart & Company.

"Unlike typical unsecured lenders who provide short-term credit to customers who invariably provide a bad debt headache, pawnbroking loans are secured against the value of a pledged item, one that is valuable and highly liquid, i.e. gold," the broker says in a note.

It cites Albermarle & Bond (ALBH.L) and H&T Group (HTGR.L) as being well-positioned to benefit from the current inclement economic climate.

"Both A&B and H&T have extensive trading histories that span the economic cycle. Performance throughout this cycle has been impressive," Daniel Stewart says. "It could be argued that current market conditions (scarcity of credit & high gold price) are better than they have been for some years."

A&B is down 3.9 percent this year, while H&T has gained 18 percent, and Daniel Stewart sees the latter as the best bet for the year ahead.

"We see the risk to forecasts for both businesses being on the upside, particularly for H&T who report 2008 full year results on the 20 March."