Friday lunchtime business bulletin

Jun 20 2008 By Andrew Mernin

Housebuilders were the standout stocks in the London market today as reports of a deal between debt-laden Barratt Developments and its banks sent the sector soaring.

Trade publication Building said agreement had been reached to waive a banking covenant clause threatened by valuation write downs later this year.

It helped buoy the under-pressure sector while the FTSE 100 Index struggled for direction elsewhere, dipping two points to 5706.4 by mid-morning.

Barratt jumped nearly 17%, or 13.25p to 91.5p, on the back of the bank deal reports, making it the best performer in the second tier. Charles Church owner Persimmon also topped the Footsie risers’ chart, rising 8% or 29.5p to 394.5p.

Fuel-thirsty stocks such as British Airways and Carnival also made gains as the decision by China to raise energy prices kept the cost of a barrel of oil below recent records. BA rose 3.5p to 229.5p and cruise ship firm Carnival lifted 8p to 1747p.

Halifax Bank of Scotland’s £4bn investor cash-call came under further pressure today after share price falls sent the stock back down to within sight of the discounted offer price.

A second day of share price woes, following yesterday’s 7% decline on further write-downs and bad debt warnings, saw HBOS shares drop another 3% at one stage to less than 10p above the 275p being offered to investors.

HBOS sought to reassure that trading was ``satisfactory" yesterday, but news of £1 billion in write-downs and the potential for rising bad debts amid a worsening outlook for house prices sent the stock tumbling.

HBOS warned that property prices were now set to fall by 9% this year - a near-doubling of its previous estimate.

Transport company Stobart today said it was trading in line with expectations, despite the economic slowdown and rising fuel prices.

The firm, which has more than 1,500 trucks and 2,900 trailers, pointed out it was protected from fuel increases by price escalators in customer contracts.

However, it said it was ``mindful" of the impact that the rising cost of fuel will have on its customers and the transport industry as a whole. It said it was working with government and industry leaders to establish ways in which the burden of rising oil prices can be eased.

The company - formed by a merger between ports group Westbury and Eddie Stobart last year - said it was also ``working hard" to reduce the amount of fuel it uses by cutting wasted journeys by its lorries.

The pound at noon was US$1.9765 compared to US$1.9729 at the previous close while the euro at noon was £0.7901  compared to £0.7856 at the previous close.