Market Report: Housebuilders have more room to grow

Pile into property was the call from City scribblers today. But not bricks and mortar. HSBC's analysts think the market is underestimating shares in the builders of houses. This may come as surprising to some – the UK housebuilder sector has already risen by an average of 24 per cent so far this year, outperforming the mid-cap index by 13 per cent. But HSBC's property team think the "Government's 'game-changing' housing market stimulus" announced at last month's Budget means the housebuilders are set to grow even further.

They now rate seven of the eight housebuilders overweight with only Berkeley Group downgraded to neutral. They think that for every one percentage point of house price inflation, housebuilders' pre-tax profits could add 6-13 per cent.

Their argument goes like this: housing supply is tight, mortgage volumes will rise, and the Government's "Help to Buy" scheme will only make things better.

Of all the stocks, they think Barratt is "most heavily geared to a recovery", and investors bought into their story. The shares added 13.4p to 280.4p and HSBC gave them a price target of 355p.

The FTSE 100 continued the week's advance, helped by higher-than-expected Chinese import numbers. China's surprise trade deficit for March means there is stronger demand for raw materials, so miners were in favour on the benchmark index, which added 74.16 points to 6,387.37.

Vedanta built up a 63p gain to 1,179p after a strong production update.

Diageo rose 22p to 1,987.5p, helped by Nomura, which ranked the Guinness and Smirnoff-vodka owner an attractive buy after recent profit-taking. But analysts also warned that the spirits group's attempt to take to a majority stake in India's United Spirits could fail as shareholders turn up their noses at the UK group's 1,440 rupees (1,724p) a share bid to buy 26 per cent of the company on the open market. Some also questioned whether it can still secure the other 27 per cent stake from United Spirit's Vijay Mallya given the Indian tycoon's troubles with his loss-making Kingfisher Airlines.

Last week's fears of a bird flu pandemic have eased, and airline and travel stocks recovered. EasyJet soared 68p to 1,090p to the highest spot on the top flight index and British Airways' owner IAG climbed 13.7p to 250.9p.

Back on the mid-tier index, AZ Electronics, the maker of chemicals used in smartphone screens, issued a profit warning on Tuesday, but the shares rose 33.6p to 273.6p after UBS analysts raised it to buy from neutral but cut their price target to 340p. Eight directors bought shares in the company following the dip in the price. A total of 170,557 shares for a total cost of £451,000 were bought by directors including the chief executive, Geoff Wild, and John Whybrow, the chairman.

Another director deal came in the shape of Centamin Egypt's chief executive and chairman, Josef El-Raghy, who bought 500,000 shares following shining production results at the gold miner the day before. The shares glistened up 0.37p to 47.33p.

The small cap gold miner Petropavlovsk, previously named after its co-founder and chairman, Peter Hambro, issued an update on his share sale. It edged down 0.3p to 208.4p. Mr Hambro confirmed the reduction of his stake from 4.62 per cent to 3.43 per cent. The reduction came as a result of a derivative deal – a shares loan – with JP Morgan. It was entered into in January 2011 with 2 million-odd shares valued at £10.68 each. JP Morgan received the shares, now worth less than £5m.

There was some good news for investors who follow Nat Rothschild. After a catalogue of problems at the coal-miner Bumi, shares in his Genel Energy spurted up more than 6 per cent on news of its oil find in Kurdistan. Genel, run by the former BP boss Tony Hayward, is the largest producer in the oil-rich Kurdish region of Iraq, although it has been in dispute with the Iraqi government over exporting oil from the semi-autonomous region. These problems were put to one side when Genel announced a "significant" oil find at the first of five wells in the Chia Surkh region. The shares gushed up 51p to 850p, the highest in five months for the small-cap explorer. However, the price of the company, created in 2011 via a reversal of Turkey's Genel into a cash shell put together by Mr Rothschild, is below its 2011 float price of 1,000p.

Aim-listed Immunodiagnostic Systems Holdings is "the most interesting recovery story in our coverage", Investec analysts said after its trading update, and the shares were 31p better off at 321p.

News
Jacqueline Bisset has claimed that young women today are obsessed with being 'hot', rather than 'charming', 'romantic' or 'beautiful'
people
Arts and Entertainment
Ben Affleck stars as prime suspect Nick Dunne in the film adaptation of Gone Girl
filmBen Affleck and Rosamund Pike excel in David Fincher's film, says Geoffrey Macnab
Arts and Entertainment
Lena Dunham
booksLena Dunham's memoirs - written at the age of 28 - are honest to the point of making you squirm
Sport
Frank Lampard and his non-celebration
premier leagueManchester City vs Chelsea match report from the Etihad Stadium
PROMOTED VIDEO
Arts and Entertainment
A bit rich: Maggie Smith in Downton Abbey
tvSeries 5 opening episode attracts lowest ratings since drama began
News
people
News
i100
Life and Style
A new app has been launched that enables people to have a cuddle from a stranger
techNew app offers 'PG alternative' to dating services like Tinder
Sport
Greg Dyke insists he will not resign as Football Association chairman after receiving a watch worth more than £16,000 but has called for an end to the culture of gifts being given to football officials
football
Arts and Entertainment
Jake Quickenden sings his heart out in his second audition
tvX Factor: How did the Jakes - and Charlie Martinez - fare?
Sport
premier league
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Rachel, Chandler and Ross try to get Ross's sofa up the stairs in the famous 'Pivot!' scene
tv
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvOnly remaining original cast-member to leave crime series
Sport
Mario Balotelli celebrates his first Liverpool goal
premier leagueLiverpool striker expressed his opinion about the 5-3 thriller with Leicester - then this happened
Arts and Entertainment
Female fans want more explicit male sex in Game of Thrones, George R R Martin says
tvSpoiler warning: Star of George RR Martin's hit series says viewers have 'not seen the last' of him/her
News
i100
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

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments