Market Report: City predicts crunch in the property sector

The business of flogging homes is hotting up.

Zoopla and Rightmove diverged on the mid-cap index yesterday as the City predicted a crunch in the sector and tried to pick winners. Estate agent-backed Agents Mutual is set to launch a rival property portal in January that will put the squeeze on the margins of both incumbents.

But the City thinks recently floated Zoopla has an edge – the company, which listed at 220p in June, zoomed up 11.6p to 190.2p as Goldman Sachs upgraded it to a buy, a recommendation echoed by Nomura and Barclays, although both trimmed their target prices.

Rightmove meanwhile tumbled 57p to 2186p as Investec told punters to sell, warning that Zoopla was “growing aggressively” and Rightmove’s unusually high margins are most at risk from Agents Mutual.

The FTSE 100 was quiet, with traders unwilling to make any big moves as the US headed into Thanksgiving. The blue-chip index slipped 1.97 points to 6729.17.

Educational supplies and sports kit retailer Findel collapsed 40p to 197p as first half pre-tax losses ballooned to £22m, from £3m a year earlier. The company said it has received “several expressions of interest” for its Kitbag business, which it is looking to sell. One of the interested parties is thought to be Mike Ashley.

Quindell isn’t the only company whose directors have been putting up shares as collateral for loans. Shale gas pioneer IGas yesterday clarified details of a loan that chief executive Andrew Austin entered into in January. Like Quindell’s executives, Mr Austin has done a deal with US business Equities First Holdings, selling 7.5m shares for £7m. He spent just over £400,000 of that on IGas shares. Unlike Quindell’s investors, IGas shareholders were happy to take this all on face value and the company ticked up 1.75p to 58p.

Big data pioneer WANdisco rocketed 41.5p to 370p after announcing a deal with an unnamed US credit card company worth an initial $250,000 a year, with a likely increase in that amount as the contract progresses. Investec says it now expects a “steady stream” of new contracts.