Market Report: Broker report puts Berkeley on a Swiss roll
Saturday 22 December 2007
Housebuilders have had a tough year and many were sleighed again yesterday but a report from UBS provided some festive cheer for Berkeley Group.
The Swiss broker said the group was "perfectly positioned", with 1.45bn for forward sales and its cash pile increasing 100m in the first half of 2008, while increasing its owned land. The report sent Berkeley soaring 84p, although the euphoria receded a touch as it closed up 42p to 1,315p.
Elsewhere, the sector was feeling the seasonal chill, despite a buoyant market, with Barratt Developments the worst performer, down 2.2 per cent to 431.25p.
There were only 18 stocks in negative territory at the end of the day, rounded off by Northern Rock, which celebrated its last session among the blue chips by sitting right at the bottom. It shed 7 per cent to 85.5p, just off all-time lows.
Christmas had come early for the FTSE 100, which soared to close 88.5 points higher at 6,434.1. The market was buoyed by better-than-expected retail figures and a strong performance in the US. The top tier was led up by the miners, after rises in gold and copper prices. Pick of the sector was Antofagasta, up 4.5 per cent to 714.5p, with Anglo American close behind, up 4.5 per cent to 3,013p.
SABMiller was fizzing in the afternoon as it announced the signing of its definitive agreement with Molson Coors. The two brewing giants revealed in October that they were to merge the Miller and Coors businesses in the US. It finished top riser, up 6.8 per cent to 1,406p.
Rolls-Royce Group also had its pedal to the metal as it revved up 4.5 per cent to 533p. This followed announcements on the previous day that it had extended an offshore marine contract, and paid 500m to cut its UK pension deficit.
Northern Foods was looking tasty on the mid tier, following support from Merrill Lynch. The group rose 5.6 per cent to 95p as the US broker put a lip-smacking "buy" recommendation on the stock with a 100p price target. It said the upgrades came after Northern's announcement it was to buy back 5 per cent of its shares earlier this month.
Top of the second string was Emap, which put in a storming 21.8 per cent rise to 925p. The leap came after it announced that Guardian Media Group and Apax Partners are to buy its business-to-business operation for 1.2bn.
As one deal was salvaged another collapsed, as Lord Harris of Peckham walked away from an approach for Carpetright. His consortium said it could not secure funding for a bid in the wake of the credit turmoil, sending the stock 17.6 per cent weaker to 880p.
The decline of another property stock, Capital & Regional, is beginning to look terminal. The group was touching 1,700p in February, only to swan dive as credit fears gripped the market. It was down a further 3.6 per cent yesterday to close at 405p.
The UK's merger regulator, the Office of Fair Trading, put a note out yesterday saying it may consider whether Carillion's takeover of Alfred McAlpine would lessen competition in the construction sector, sending the potential buyer down 6p to 347.75p. Mc-Alpine, which fell 8p to 530p, recommended its rival's 572m bid several weeks ago.
The topsy-turvy fortnight at Northgate Information Solutions ended on a high yesterday as it agreed to a 593m deal from Kohlberg Kravis Roberts. The shares leapt 44 per cent to 92p the highest for more than a year on the 95p-per-share deal. The group revealed it was in talks last week, an announcement that lifted the stock's value. This followed the day after an analyst had raised fears that the group could breach its banking covenants within two years.
The announcement of a preliminary approach lifted EBT Mobile China 38.2 per cent to 19p. The group revealed it was in talks with an unnamed suitor, adding it was also examining other strategic alternatives.
Eckoh, the telecoms group, rose 10 per cent to 6.88p as it revealed it had seen approaches from more than one party over potential offers.
The office space developer Your Space saw its value rise by a fifth to 129p despite a fall in first-half profits. The group rose on its positive outlook, saying it believes "the current market conditions will provide an opportunity to expand the model more quickly within the UK".
Down in the dumps was Straight, which supplies containers for recycling waste. It slumped 20 per cent to 76p after it said full-year profits would be "materially below current market expectations". Panmure Gordon lowered its rating to "hold" on the news.
The care home group ADL was in need of a bit of TLC of its own as it revealed first-half losses. It fell 15.9 per cent to 45p as it said that charges brought against its directors would block further development at the group.
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