Tullett Prebon, Terry Smith's bond broking specialist, now sits alongside Icap, the arch-rival run by his nemesis Michael Spencer, as one of the few beneficiaries of the credit market's liquidity and confidence squeeze.

As well as a smattering of hedge funds who picked the right trading strategy, the only other likely winners are stock exchanges (the London Stock Exchange today reported record trading volumes for August) financial brokers and, in the end, buyers of distressed debt.

The markets await the reporting season among investment banks with a mixture of anticipation and dread. Only interventions by central banks have prevented the damage from spiralling; parts of the credit markets remain firmly shut.

This has all been good news for Mr Smith and Tullett, which has experienced three months of record trading volumes as energised dealers buy "safe-haven" bonds and credit derivatives as they unwind other risky investments.

Little of this showed in today's first-half results, which covered the six-month period to the end of June. Pre-tax profits fell 16 per cent to £57.1 million, although revenues pushed ahead and operating profits grew at 8 per cent excluding the impact of currency conversions.

But this actually says good things about Mr Smith, who is investing heavily in growing the business, which was demerged from Collins Stewart at the end of last year in the express belief that both were worth more as separate units.

The colourful broking boss has spent £40 million buying a brokerage in North America, investing in electronic trading operations and shipping in staff equipped to move to the next stage.

In an age where chief executives feel hamstrung by investor expectations about short term growth, this is commendable, although Tullett shareholders are less likely to be impatient, having been rewarded with a £300 million cashback at the time of the demerger.

Mr Smith is expecting his investment to pay off later this year and into 2008.

The shares have vacillated, between a pre-slump high in mid-May of 520p and an August low of 360p. The threat that Icap is winning business at a margin-eating rate must have played its part, but it also shows that no-one is immune from investors' nerves.

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