Builders shrink as broker dents Help to Buy hopes

HOUSEBUILDERS were among the greatest fallers on the stock market yesterday as Barclays slashed its outlook for several of the major construction firms.

The housing sector is widely expected to be centre stage in next month’s Budget as the Government looks to woo younger voters with further extensions to the Help to Buy scheme.

But Barclays said with hopes so high if investors are disappointed then share prices could suffer.

The broker warned that expectations for the industry ‘may have run ahead of themselves’.

It said the FTSE 350 household index, which includes the major housebuilders, was up around 14pc so far this year compared with a rise of just 6pc on the broader FTSE 350 as a whole.

After months of strong performance, Barclays downgraded its ratings for Persimmon, Berkeley, Redrow, Bellway and Taylor Wimpey. But it added that builders faced ‘ few difficulties selling homes at present’, and headwinds were more likely to be met in the ability to develop homes quickly enough and a skills shortage in the sector.

Berkeley – whose shares are up 33pc so far this year alone – was the worst hit by the broker’s cuts. The greatest faller on the FTSE 100 (0.2pc lower, or 17.2 points, at 7487.8p) for the day, it closed down 1.4pc, or 53p, at 3754p.

Persimmon was off 0.6pc, or 18p, to 2813p. Barratt fell 0.5pc, or 3.5p, to 653p. Bellway tumbled 1.1pc or 42p to 3656p. Taylor Wimpey dropped 0.5pc or 1.1p to 200.8p.

A buy rating from N+1 Singer sent Genus soaring.

The positive outlook from the stockbroker saw shares in the animal genetics company reach a record high. N+1 Singer’s decision was spurred by improving conditions in the dairy market, where Genus operates, and anticipated investment in research and development by the firm. It upped its target price for the stock from 1844p to 2485p.

Yesterday, shares surged 8.7pc, or 195p, to 2430p.

Pharma firm Hikma advanced as it announced its US subsidiary has launched an injectable treatment. Pantoprazole sodium for injection helps to treat acid reflux disease. US sales of the drug were £79m in the 12 months to August. Hikma said the launch of its product would reduce the shortage of the treatment in the US. Shares gained 1.7pc, or 19p, to 1142p. An announcement by Euro

money that it has sold its wine exhibition businesses caused a hiccup. The group has offloaded its 74pc stake in World Bulk Wine Exhibition – an annual event which takes place in Amsterdam each November – to French firm Comexposium. Euromoney (in which DMGT has a 49pc stake) has also sold Adhesion, a Parisbased exhibitions business it had owned for more than 20 years. Euromoney said the sales were in line with its efforts to sell certain businesses which do not align with its strategy. Shares dropped 0.4pc, or 5p, to 1160p.

Mondi continued to trail after a fall in the South African rand last week. The currency weakened by 1.2pc on Friday after the South African budget speech forecast a widening of the country’s deficit. The South African treasury halved its economic growth forecast for the year, knocking investor confidence in firms with exposure to the region such as Investec and Mediclinic. Shares in Mondi, founded in South Africa in 1967, fell 2pc, or 37p, to 1829p.

Keywords Studios announced plans to buy US business VMC.

The firm, which offers translation services for video games so they can be sold around the world, said the addition should be ‘significantly earnings enhancing’.

Keywords shares sank 2.4pc, or 39p, to 1605p.