Market Report: Travis Perkins gets built up to top spot
Tuesday 02 July 2013
Punters were betting that builders' merchants will benefit from the stream of new homeowners. New data yesterday revealed that house prices, mortgage approvals and home sales are all up. Investors think the strong housing market will prove a tonic for the new blue-chip entrant Travis Perkins, the builders' merchant that also owns Wickes. It built up more than a 5 per cent gain and took the top spot on the benchmark index yesterday.
House prices rose at their strongest rate in almost six years last month, increasing across almost a third of the country, figures from the property analysts Hometrack found, while manufacturing data and mortgage applications in the UK were a big improvement on last month.
Travis Perkins continues to climb after recent lows, analysts at Liberum Capital noted, and they rated it a buy. A year ago the stock was at the 970p level.
The Wickes owner came top in a rising market and constructed a 75p advantage to 1,531p. It was joined by the house builder Persimmon, up 59p to 1,240p.
After finishing both the month and the quarter down last week, the benchmark index advanced yesterday – on the first day in the job for the Bank of England Governor, Mark Carney. The FTSE 100 managed a 92.31 points rise to 6,307.78, breaking the 6,300 barrier for the first time since mid-June. Its lift was helped by encouraging UK manufacturing data and as-expected Chinese purchasing data.
The Chinese manufacturing news helped miners to recover and Antofagasta charged ahead 37.5p to 832.5p.
Tullow Oil gushed 48p to 1,049p, ahead of a trading update due tomorrow. Analysts at Nomura upgraded the company's stock from "reduce"' to "neutral".
Some thought this day would never come... the banking bear Ian Gordon, from Investec, now thinks it is the right time to buy Royal Bank of Scotland shares. He thinks that despite the Chancellor's "alarming Mansion House comments" on bank privatisation, the "damage may yet be avoided".
He thinks now the shares have collapsed it is right to defer the RBS share sale and "it is the time to buy!" He rates it a buy with a 310p price target for shares that gathered 8.4p to 281.9p.
Close to the bottom of the pile was the publisher Pearson. It retreated as the company announced the completion of its joint venture with Bertelsmann to create Penguin Random House. Pearson declined 9p to 1,162p.
On the mid-cap index, the energy services group Hunting said trading was in line with expectations, and it powered ahead 66p to 798p.
Investors dialled up the Aim-listed mobile payments group Monitise when it announced a multi-million-pound deal with the Spanish telecoms giant Telefonica. Monitise's house broker, Canaccord Genuity, reckoned the deal is a "game-changing contract" valued at the same size as Monitise's deal with Visa this year of around €45m (£39m).
Telefonica's digital arm has signed a five-year deal with Monitise to focus on UK customers initially, with overseas expansion to come. Investors piled in and it rose 1.75p to 36.25p.
Aim-listed Fox Marble, which exports Kosovan marble from the area which supplied marble for the construction of the White House in Washington, said it had agreed a deal to supply cut and polished marble to the UK wholesaler Pisani in the UK. It was 0.25p stronger at 17.5p.
Gemfields' postponed June emeralds auction will now take place later this month, so revenue from the sales will be recognised in the next financial year. Gemfields had to postpone the auction due to a crackdown by the Zambian authorities. It was scheduled to take place in Singapore, but the Zambian ministry of mines now requires that gems excavated in the country be auctioned in Zambia. The sales will now take place in Lusaka between 15-19 July, and Gemfields declined 1.38p to 21.88p.
The security products group Petards said it had made an offer for the waste management services group Water Hall. Petards will issue 12.5 new shares and £2 nominal convertible loan notes per 100 shares in Water Hall to fund its buyout. This values Water Hall, which owns 30 per cent of Petards, at about £3.56m. Petards dipped 2p to 14.5p as Water Hall bubbled up 0.38p to 2.38p.
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