Only when the full extent of the damage to the company's balance sheet is revealed in December will anything

Only when the full extent of the damage to the company's balance sheet is revealed in December will anything but the utmost caution be appropriate.Thorn music sweeter than CBI presidencyThe Confederation of British Industry is still an important and influential organisation but Sir Colin Southgate, chairman of Thorn EMI, can hardly be blamed for turning down its presidency. But in engineering and contracting, confidence is all - customers will simply not consider placing orders with a company under a cloud as large and dark as that hanging over Trafalgar.The other reason Jardine will probably avoid pulling the plug is the doubt doing so would cast on the company's whole strategy. It has got things wrong before, investing in UK property just before the 1970s collapse, for example, but with the imminent arrival of the Chinese in Hong Kong the stakes are immeasurably higher this time round. Not that Hongkong Land's continued support necessarily makes Trafs' battered shares any more attractive.

Jardine must risk throwing good money after bad.If Trafs were a manufacturing business, the strength of its product might be enough to pull it through. If Trafs is to survive its current deep-seated problems it must pare down to its contracting and engineering core, selling off Cunard and Ideal, the housebuilder, and inject enough new cash to convince customers the company has a viable future. In the context of a giant trading empire such as Jardine, pounds 300m may not be life-threatening but it is the sort of fouled-up investment that would rightly be the end of many a chief executiveClinging on and hoping for the best is unlikely to be a realistic option for Hongkong Land, the subsidiary through which Jardine took the ill- conceived stake. There are few places where loss of face stings so harshly. What is most remarkable is the way that, so far, Henry and Simon Keswick have survived the loss to Jardine's shareholders of so much of their investment in Trafs. Maybe the bargain hunters that swept the shares off their lows yesterday are right to gamble that the brothers would never dare to crystallise the loss of the pounds 300m they have poured in to the sinking conglomerate since 1992. It is no surprise that cocktail party gossip in the colony's dying days is all about the Keswicks' latest disaster, the collapse of Jardine Matheson's escape tunnel from the Chinese authorities that the so-called Noble House has always failed to appease.

It is quite something when Trafalgar House, once one of the great names of British industry, becomes nothing more than a penny stock punt for the spivvier end of the stock market. But yesterday's price gyrations in another session of extremely heavy volume confirmed that to be the case. The seasonally adjusted figures stood at 43,000, the highest number since February."The underlying picture is more buoyant than even these figures show since Cheltenham & Gloucester became a bank in August," he said. "This should have reduced the monthly numbers by about 7,000 yet they have risen. If we are right then housing activity and prices will rebound strongly in the next few months."Comment, page 23. The most important figures were those for new mortgage commitments, he said. Net lending, which takes account of loans repaid, fell 18 per cent to pounds 614m from pounds 750m.