Builders shut sites but shares still bounce back
SOME of Britain’s largest housebuilders chose to shut down their construction sites despite the Government granting them permission to stay open.
Official advice has exempted builders from a lockdown that is seeing all non-essential shops close and social gatherings banned in an attempt to curb the spread of the coronavirus.
Work can continue as normal on construction sites so long as workers keep to guidance on social distancing by staying two metres apart.
But the industry was divided yesterday as listed giants such as
Taylor Wimpey and Barratt Developments decided to close their sites.
Taylor Wimpey said it was ‘taking this action because we believe it is the right thing to do’.
Barratt said it had the health and safety of its staff and customers was its ‘number one priority’, and meant it would need to temporarily close a staggering 400 sites and offices across the country. Bovis, which is now part of Vistry Group, followed suit, but
Redrow and Berkeley Group have chosen to keep their sites open.
Despite deciding on opposite strategies from the same advice, housebuilders all notched up gains yesterday amid a wider stock market rally.
Shares in Taylor Wimpey rose 2pc, or 2.3p, to 116.3p, while Barratt climbed 5.4pc, or 21p, to 409.3p, and Vistry closed 1.8pc higher, up 11p to 619p.
But shares in firms keeping their sites open ended sharply higher – with Redrow adding 7.8pc, or 26.5p, to close at 365p, and Berkeley Group rising 9.3pc, or 292p to 3423p. Persimmon, which has not confirmed its next move either way, jumped 6.9pc, or 109.5p, to 1691.5p. The gains among housebuilders came as London and global stock markets staged stunning rebounds after weeks of falling deeper into the red.
The FTSE 100 notched up its best day of trading ever, with more than £113bn being added to the value of its constituent companies. It closed up 9.1pc, or 451.12 points at 5446.01 – beating the previous record rise of 431 points.
The roaring rally came as US politicians prepared to pass a potentially game-changing stimulus package.
This would include pumping out as much as $2trillion (£1.7 trillion) to support businesses and the wider economy from damage caused by the coronavirus pandemic – which would come in addition to support measures announced this week by the US central bank, the Federal Reserve.
In Europe, Germany’s Dax rose 11pc while France’s Cac 40 climbed 8pc. Commodities such as gold and oil also climbed and, over on Wall Street, the Dow added 11.37pc. Investors will be hoping the rally lasts – but may well fear that it will not. Back in the UK, the more domestically focused
FTSE 250 index rose 8.4pc, or 1094.72 points, to 14172.73.
Dove soap maker Unilever, which closed 1.7pc higher, up 65p, at 3997.5p, pledged to donate £91.5m of soap, sanitizer, bleach and food to help during the pandemic. It also promised help to smaller suppliers and its own staff if they were left unable to work and were not covered by Government protection schemes. Struggling logistics group Eddie
Stobart rose a modest 3.6pc, or 0.4p, to 12.3p, after saying it has seen a surge in business that its lorries would normally only experience at Christmas.
Elsewhere, in news not related to the pandemic, AIM-listed mattress company Eve Sleep gave hope to investors in the doomed Woodford Equity Income fund after revealing its losses had narrowed by £8m to £12.1m in 2019. Its shares closed up 3.03pc, or 0.03p, at 0.85p.