Market Report: Help to Buy scheme props up builders

 

What a difference a weekend makes. On Friday housebuilder stocks were in the doghouse amid concerns of a house price bubble and news that the Bank of England could alter the Government’s Help to Buy scheme next year.

But yesterday confirmation that David Cameron will bring Help to Buy’s £12bn mortgage guarantee scheme forward by three months - to start next week - thrust the builders to the top of the table.

Investors pushed the thought of a property bubble to the back of their minds and blue chip builder Persimmon soared 25p to 1,086p. The housing stocks boom reached the mid-tier index and Bellway was the best performer there, up 53p to 1,315p. Taylor Wimpey added 3.4p to 100.4p, Redrow was 6p ahead at 233p and Barratt Developments gained 6.5p to 308.6p.

Property-watchers at Liberum Capital said: “Housebuilders benefit from a more buoyant housing market, while merchants should benefit from increased transactions – we estimate 20 per cent more mortgages, and 15 per cent more transactions.”

Liberum tipped not only the housebuilders but also the builders’ merchant and DIY retailer Travis Perkins as a buy, and it built up a 2p rise to 1,650p.

The housebuilders made up most of the risers in contrast to a sea of red across traders’ screens as US lawmakers remained at loggerheads over the American budget. Italian political instability added to concerns. The FTSE 100 tumbled 45.3 points to 6,467.36 as Chinese manufacturing data also disappointed.

David Jones, the chief market strategist at IG, said yesterday was like a “throwback to the bad old days of the financial crisis”.

He added: “In the great scheme of things the fall was nothing major – the FTSE is still just above the September lows. But more political upheaval, both in Europe and the USA, will do little for market sentiment.”

Punters had bought in to the rumour that a hedge fund was fighting for a break-up of the troubled security group G4S. Cevian Capital, the activist investor fund chaired by the former financial services minister Lord Myners, is reported to be putting pressure on G4S to split itself up. Cevian has amassed a 5.1 per cent stake in the group, and the word is it is pushing for a sale of its cash-security business to raise money for shareholders. Shares were in positive territory during the morning but lost momentum during the afternoon session and closed up 0.4p at 254.3p.

Miners relying on a strong Asian market were hit by the weaker Chinese manufacturing data. Mexican metal digger Fresnillo lost 27p to 973p and Glencore Xstrata shed 7.3p to 336.7p.

Pharmaceuticals group Shire, a perennial M&A target, was 11p healthier at 2,478p after an upbeat note from JPMorgan Cazenove. James Gordon at Cazenove upgraded Shire to overweight, and said its pipeline of new drugs and its cost-cutting plan – on which it will update at its third-quarter results later this month – would “drive performance”.

Haulier Stobart’s biomass products arm has signed a 15-year contract with Western Bioenergy to supply 150,000 tonnes of biomass fuel a year into Western’s plant in South Wales. The contract is part of Stobart’s Master Framework Agreement with Greensphere Capital, the new owner of Western. The deal failed to drive up Stobart’s shares and it stalled at 125p.

The AIM-listed travel group Travelzest continued to confound the market. The debt-laden former naturist tour operator, which is relying on its lenders to continue to trade, jumped 0.585p to 1.27p.

The falling gold price weighed on pawnbroker Albemarle & Bond and it announced an emergency £35m rights issue yesterday. The group plummeted 50.5p – or 40.4 per cent – to 74.5p.

Traders liked the look of property group Conygar Investment. They noted the recent director dealings, including chief executive Robert Ware’s purchase of 50,000 shares at 129p last month. Last week director Preston Rabl bought 250,000 shares at 128.5p. Yesterday Conygar added 4p to 133.25p.

The Indian windpower producer Mytrah Energy reported first-half earnings of $24.5m (£15.2m). It said operational capacity could almost double this year, and its shares powered ahead 7p to 89.5p.

The North Sea-focused Independent Oil and Gas listed on Aim and raised £2m. It started trading yesterday at 23.79p and the shares closed at 24p.

Buy: BANK OF GEORGIA

Snap up shares in Bank of Georgia, Peel Hunt advises. The broker claims that the bank is “a risk worth taking” and that the “perceived risks” of investing in Georgia are overstated. Shares are around 1,932p a pop and Peel Hunt gave them a target price of 2,155p.

Sell: ROYAL BANK OF SCOTLAND

Flog shares in Royal Bank of Scotland, Citi insists. The broker acknowledges the spin-off of 314 RBS branches to become Williams & Glyn’s but thinks this disposal will have negative implications for RBS’ “earnings, return profile and capital position” . It rates it a sell with a 270p price target for shares that are currently at 359.9p.

Hold: ASTRAZENECA

Panmure Gordon urges us to hang on to Astra shares with the reminder that “one swallow does not a summer make”. The broker is referring to its “small upgrade” for the pharma giant on news it has won approval for its ovarian cancer product. This “should not be seen as transformative”, however. Shares are 3,215.5p with a 3,200p price target.

Start your day with The Independent, sign up for daily news emails
News
Young Winstone: His ‘tough-guy’ image is a misconception
people
Sport
Adnan Januzaj and Gareth Bale
footballManchester United set to loan out Januzaj to make room for Bale - if a move for the Welshman firms up
Arts and Entertainment
Ellie Levenson’s The Election book demystifies politics for children
bookNew children's book primes the next generation for politics
News
Outspoken: Alexander Fury, John Rentoul, Ellen E Jones and Katy Guest
newsFrom the Scottish referendum to the Ice Bucket Challenge, our writers voice their opinions
PROMOTED VIDEO
News
i100
Sport
Yaya Sanogo, Mats Hummels, Troy Deeney and Adnan Januzaj
footballMost Premier League sides are after a striker, but here's a full run down of the ins and outs that could happen over the next month
Arts and Entertainment
L to R: Hawkeye (Jeremy Renner), Captain America (Chris Evans) & Black Widow (Scarlett Johansson) in Avengers Assemble
film
News
Nigel Farage celebrates with a pint after early local election results in the Hoy and Helmet pub in South Benfleet in Essex
peopleHe has shaped British politics 'for good or ill'
Arts and Entertainment
Pharrell Williams' “Happy” was the most searched-for song lyric of 2014
musicThe power of song never greater, according to our internet searches
Sport
Tim Sherwood raises his hand after the 1-0 victory over Stoke
footballFormer Tottenham boss leads list of candidates to replace Neil Warnock
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Arts and Entertainment
Sink the Pink's 2013 New Year's Eve party
musicFour of Britain's top DJs give their verdict on how to party into 2015
Voices
Strictly Come Dancing was watched by 6.9m viewers
voicesIt has been hard to form generally accepted cultural standards since the middle of the 19th century – and the disintegration is only going to accelerate, says DJ Taylor
Arts and Entertainment
Roffey says: 'All of us carry shame and taboo around about our sexuality. But I was determined not to let shame stop me writing my memoir.'
books
News
i100
News
Caplan says of Jacobs: 'She is a very collaborative director, and gives actors a lot of freedom. She makes things happen.'
people
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: VP/SVP Credit Quant- NY- Investment Bank

Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...

Selby Jennings: Quantitative Research | Equity | New York

Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...

Selby Jennings: SVP Model Validation

Not specified: Selby Jennings: SVP Model Validation This top tiered investment...

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

Day In a Page

War with Isis: The West needs more than a White Knight

The West needs more than a White Knight

Despite billions spent on weapons, the US has not been able to counter Isis's gruesome tactics, says Patrick Cockburn
Return to Helmand: Private Davey Graham recalls the day he was shot by the Taliban

'The day I was shot by the Taliban'

Private Davey Graham was shot five times during an ambush in 2007 - it was the first, controversial photograph to show the dangers our soldiers faced in Helmand province
Revealed: the best and worst airlines for delays

Revealed: the best and worst airlines for delays

Many flyers are failing to claim compensation to which they are entitled, a new survey has found
The stories that defined 2014: From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions

The stories that defined 2014

From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions
Stoke-on-Trent becomes first British city to be classified as 'disaster resilient' by the United Nations

Disaster looming? Now you know where to head...

Which British city has become the first to be awarded special 'resilience' status by the UN?
Finally, a diet that works: Californian pastor's wildly popular Daniel Plan has seen his congregation greatly reduced

Finally, a diet that works

Californian pastor's wildly popular Daniel Plan has seen his congregation greatly reduced
Say it with... lyrics: The power of song was never greater, according to our internet searches

Say it with... lyrics

The power of song was never greater, according to our internet searches
Professor Danielle George: On a mission to bring back the art of 'thinkering'

The joys of 'thinkering'

Professor Danielle George on why we have to nurture tomorrow's scientists today
Monique Roffey: The author on father figures, the nation's narcissism and New Year reflections

Monique Roffey interview

The author on father figures, the nation's narcissism and New Year reflections
Introducing my anti-heroes of 2014

Introducing my anti-heroes of 2014

Their outrageousness and originality makes the world a bit more interesting, says Ellen E Jones
DJ Taylor: Good taste? It's all a matter of timing...

Good taste? It's all a matter of timing...

It has been hard to form generally accepted cultural standards since the middle of the 19th century – and the disintegration is only going to accelerate, says DJ Taylor
Olivia Jacobs & Ben Caplan: 'Ben thought the play was called 'Christian Love'. It was 'Christie in Love' - about a necrophiliac serial killer'

How we met

Olivia Jacobs and Ben Caplan
Bill Granger recipes: Our chef's breakfasts will revitalise you in time for the New Year

Bill Granger's healthy breakfasts

Our chef's healthy recipes are perfect if you've overindulged during the festive season
Transfer guide: From Arsenal to West Ham - what does your club need in the January transfer window?

Who does your club need in the transfer window?

Most Premier League sides are after a striker, but here's a full run down of the ins and outs that could happen over the next month
The Last Word: From aliens at FA to yak’s milk in the Tour, here’s to 2015

Michael Calvin's Last Word

From aliens at FA to yak’s milk in the Tour, here’s to 2015