Houses not so safe as confidence falls
Oct 6 2007 by Graeme King, The Journal
THE housing market dominated the news in the regional portfolio yesterday. ABN Amro said it had cut its forecast for UK housebuilders and had downgraded its sector rating to neutral from overweight.
This followed its view that trading conditions were likely to soften for UK housebuilders because of stricter lending standards, higher mortgage rates and lower confidence. This news took its toll on the share prices of regional stocks Bellway and Barratt Developments.
Barratt was the biggest casualty, as ABN Amro downgraded its share rating from buy to sell and reduced its share price target to 700p.
Barratt Developments closed at 765p, down 4.14% on the day, and Bellway followed suit, losing 21p to close at 1080p.
Elsewhere, Grainger – where we act as joint broker – announced that its full year trading profit would exceed last year’s.
The group, which is the largest listed residential property owner, said total sales for the 12 months to September 30 were expected to be about £128m, which is an increase of £2m from 2006. Grainger is due to release its full-year results on November 29. Its share price closed at 460p, down 3p on the day.
Northern Rock failed to extend its gain made on Thursday. It was rumoured yesterday that JC Flowers, the New York private equity group, was interested in buying Northern Rock in its entirety rather than cherry picking individual assets. It is thought it would run Northern Rock as a going concern. The share price showed little reaction and closed at 158.5p, down 3.20p
On a more positive note, Chieftain Group – where we act as broker – added 5.34% to close at 177.5p, and Southern Cross Healthcare added a further 15p to close the week at 540p.
Katie O’Neill assistant director, Wise Speke, a division of Brewin Dolphin Ltd.
