Haves and have nots of Tory win

TWO months ago Britain woke up to the first fully Conservative government for nearly two decades – and it has been something of a rollercoaster for investors ever since. The FTSE 100 index rose 2.3pc to 7046.82 on May 8 as investors and businesses who had been worried about an anti-enterprise Left-wing administration led by Ed Miliband cheered the result.

But that was as good as it got for the London market and the Footsie has since plunged nearly 9pc to 6432.21 as the crisis in Greece wiped out progress made earlier in the year.

As ever, there have been winners and losers, and among the sectors and stocks to have performed best are those seen to have benefited most from the Tory victory.

The biggest gains have been made by housebuilders – in part due to the lifting of the threat of the mansion tax planned by Labour – while estate agents, bookies and banks have also done well.

‘From an investors’ point of view it was good that we got a certain result and we didn’t have to have a second general election or worry about coalitions,’ explains George Godber, a fund manager at Miton Group.

‘It could all change in the Budget but so far you cannot say anything has been particularly hit as a result of the election. The Government are trying to be pro- business and pro-growth.’

With George Osborne delivering the first Tory Budget since 1996 today, here we look at some of the strongest performers of the last two months, and others that have lost their way.

HOUSEBUILDERS up 23.7pc

THE stand-out performer since polling day is Berkeley Group which has soared 33.9pc since polling day.

The threat of the mansion tax was particularly worrying for the company given its focus on expensive homes in London and the South East. But other builders have also benefited including Crest Nicholson, up 26.6pc, as well as Barratt Developments, Bellway and Persimmon.

‘The runaway stock market winner since the election has been the property sector, owing largely to the removal of the threat of a mansion tax,’ says Laith Khalaf, senior analyst at Hargreaves Lansdown.

‘Berkeley Group tops the tree, perhaps not surprising since its focus is London and the South East, the region a mansion tax would probably have hit hardest.’

ESTATE AGENTS up 8.1pc

LIKE the housebuilders, Britain’s army of estate agents have had a good run since the election as the property market swung back into life. Shares in Savills – which deals in many top-end houses that would have been hit by the mansion tax – are up 15.7pc.

London-focused Foxtons was also among the winners in the immediate aftermath of the election, rising 25pc in three weeks.

But it has since reversed those gains on fears of a slowdown in the London market, with analysts at Citi warning that high prices in the capital could curtail demand.

Citi has a ‘buy’ rating on Countrywide but a ‘sell’ rating on Foxtons.

GAMBLING up 6.8pc

BRITAIN’S bookmakers were very much in the cross hairs of Labour under Miliband. It was feared a Labour- led government would impose tough rules on the industry – something the bookies now don’t need to worry about.

That is not to say there were given an easy ride by the Coalition. In fact, the industry has faced higher taxes and tighter regulations in recent years. But Ladbrokes has been one of the best performing stocks of the last two months, up 19.3pc since the election, in part thanks to the result of the vote but also because of its proposed merger with Gala Coral.

Arch-rival William Hill is also up along with Bwin.Party Digital Entertainment and Rank Group.

‘Bookmakers have also enjoyed a tail wind from the election result with Labours plans to tighten industry regulations dropping out of the equation,’ says Khalaf. ‘

Ladbrokes’ share price has also been boosted by talks with Gala Coral over a possible merger.’

HOME IMPROVEMENTS

up 1.3pc

THE sector has hardly raced away since the election but a number of retailers within it have done so – not least Topps Tiles and Carpetright which are up 29.2pc and 27.2pc respectively.

According to Miton’s Godber, they have benefited from the recovery in the housing market as well as rising confidence among British households. ‘People are feeling more confident and are spending money on big ticket items,’ he says.

With inflation at rock bottom levels, employment at a record high and wages finally starting to rise again, millions of families are start- ing to feel richer. Topps and Carpetright have also issued strong results since the election – giving their share price a lift.

BANKS down 2.4pc

BRITAIN’S banks have fared pretty well – with the exception of HSBC, which has dragged the entire sector down.

Challenger bank Aldermore has led the way, up 33.8pc, followed by rival Shawbrook and Virgin Money as they look to exploit gaps left in the market by the bigger banks – particularly when it comes to business lending and attracting new customers with the promise of better returns.

Royal Bank of Scotland, Lloyds Banking Group and Barclays also made early gains, but the crisis in Greece has taken its toll on banking stocks across Europe in recent weeks. That is a headache for the Chancellor as he plans to return RBS and Lloyds to the private sector following their multi- billion pound bailouts in 2008.