Glimmer of hope for builders

Oct 28 2008 by Graeme King, The Journal

ONCE again the FTSE 100 Index retreated into the red losing 218 points in early trading before recovering some ground to finish almost 31 points down at 3852.59.

Overnight losses in Asia and fears over emerging market economies continued to batter shares in HSBC and Standard Chartered which, until recently, had proven relatively unscathed by the wider banking crisis.

Shares in local house builders Barratt Developments and Bellway on the other hand, traded higher for the majority of the day as Libor, the rate at which banks lend to each other, continued to decline below 6% and increased hopes of interest rate cuts in the coming weeks offered a glimmer of hope to the sector. Barratt and Bellway were both seen trading in excess of 10% higher during the course of the day but unfortunately could not keep up the momentum and settled to close on 49.25p and 439.5p respectively.

Elsewhere in the regional portfolio Brulines announced the completion of the acquisition of Sunderland based Edensure Ltd, for a total cash consideration of £220,000.

The deal is not expected to enhance earnings initially but is expected to be earnings enhancing in the year to March 31, 2010.

Chief executive James Dickson believes that Edensure, which provides forecourt management solutions for the UK petrol forecourt market is “a natural extension” of the group’s capabilities, and will “take the group into a new adjacent market”. Despite the positive news, shares in the company closed down to end the session on 137.5p.

Anna McKechnie anna.mckechnie@brewin.co.uk