Market Report: Countrywide debut cheers IPO market
Thursday 21 March 2013
Countrywide got off to a lively start on the London Stock Exchange yesterday as shares in Britain's biggest estate agent raced up 13 per cent to 397p, valuing the business at £848m. The shares had already been priced at the top of the range at 350p and experts said the high first-day premium bodes well for the £1.3bn flotation of Esure at the end of this week. The insurer is expected to be priced at the top of a 275p to 310p range today in time for trading to start tomorrow.
The estate agency's business could also get a boost from the Chancellor's decision to help the property market yesterday, which saw housebuilders' shares top the mid-cap index. Experts estimate that the Help to Buy scheme could drive output in the private house building sector by up to 10 per cent a year over the next three years.
Barratt Development led the charge in the sector, with its shares adding 15.8p to 255.6p, while Taylor Wimpey built up a 5.25p gain to 90.85p. Redrow was 7.4p better at 191.4p, and Bellway ticked up 47p to 1,230p.
Over on the benchmark index, the Chancellor's entire Budget statement could not lift the FTSE 100 out of negative territory and it dipped another 8.62 points to 6,432.7, its fourth day in the red.
Miners have been out of favour, but Jefferies' scribblers think "patient investors who buy high-quality miners such as Rio Tinto and BHP Billiton at current levels will be rewarded over time".
Rio added 28p to 3,135p but BHP lost 20p to 1,961.5p.
The Kazakh miner Eurasian Natural Resources (ENRC) scrapped its final dividend and reported a $1.5bn (£990m) impairment charge from weak aluminium prices and a writedown to the value of its African operations, causing it to report a loss for the year, and the shares tumbled 5.8p to 306.9p.
Back on the mid-cap index, there was good news for the gold miner Centamin Egypt. Its share price had been hit by concerns over the licence of its mine in Egypt and delays to production. But the courts in Egypt have now suspended a judgment, which means that the group can continue to mine at Sukari while the appeal progresses. The shares dipped 2.2p to 56.45p.
The holiday group Thomas Cook has agreed to sell its North America arm to Red Label Vacations, and its shares travelled up 1.2p to 106.6p.
The online betting group Betfair was boosted by news that the Italian Finance Minister has signed a decree that will permit exchange betting in Italy. The shares ticked up 27.5p to 723p.
On the small-cap index, a warning on the value of shares in the credit card protection group Card Protection Plan (CPP) sent the price tumbling. CPP, which has been fined by the Financial Services Authority for mis-selling and is in refinancing talks, said there is "significant uncertainty" as to the value of its shares and what its "financing solutions may deliver to CPP's ordinary shareholders, particularly given the current trading price of the ordinary shares".
The admission is honest, but of no comfort to those who have seen the share price fall more than 93 per cent since it listed in March 2010 at 235p.
CPP, one of Britain's biggest providers of identity theft insurance, was fined £10.5m last year, the largest retail fine from the FSA. Shortly after CPP's statement the shares crashed and ended down 9p, to 5.5p.
Hamish Ogston, the founder who owns more than 50 per cent of the group, may look to inject more capital as part of the refinancing, but there are no signs of a deal yet.
The AIM index and ISDX got their own small boost from Mr Osborne, who scrapped the payment of stamp duty on shares traded.
The AIM-listed gold miner Aureus Mining said it had agreed a £72m debt facility deal to build Liberia's first commercial gold mine. The deal follows the £50m it raised in equity last November at 50p a share. The New Liberty mine will go into production at the end of next year and the shares glistened up 2p to 40p.
The oil explorer Bowleven said it has narrowed losses and is getting closer to selling a 50 per cent stake in its Bomono permit in Cameroon. The shares jetted up 4.75p to 100p.
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