House building still has great appeal
Oct 20 2007 by Chris Knox, The Journal
IT was a better day for the region’s housebuilders with Bellway and Barratt Developments both recording good gains.
Investment house Merrill Lynch noted that the sector has great investment appeal and maintains its Buy rating on Bellway and Barratt despite reducing its price targets to 1300p and 1000p respectively.
Bellway released its full-year results earlier this week and they were in line with expectations. However, the builder said market conditions remain tough and that incentives were necessary to sell new properties. Nevertheless, Bellway’s management believe the fundamentals of the housing market remain unchanged. Bellway and Barratt Developments share prices moved higher by 2% and 1.29% to close at 1059p and 667p.
Looking forward to next week, pharmaceutical group GlaxoSmithKline is scheduled to announce its third-quarter figures on Wednesday. Investors will be looking for an update on its blockbuster diabetes product Avandia, which ran into trouble earlier this year.
The drug has had to carry stricter labelling to highlight health risks and prescriptions have fallen considerably in the US.
A final decision on Avandia’s labelling is due to be released by the FDA in the near future. GlaxoSmithKline’s share price drifted lower by 10p to finish the day at 1243p.
Elsewhere in the market, Northern Rock announced that chairman Matt Ridley is to step down from the board. The position will be filled by former Standard Chartered chairman Bryan Sanderson.
Northern Rock’s share price finished the session 17.6p lower at 186.90p. Best performance in the regional portfolio was by Opsec Security Group. The shares powered higher by 8% to close the day at 67p.
Anthony Peart is an assistant director of the Wise Speke division of Brewin Dolphin Ltd
