Oct. 02--Investors argue that estate agent Countrywide is well placed to ride the recovery in the housebuilding sector.
After around six years in the doldrums the house market is picking up due to an improving economy, an increased supply of mortgages and government-supported measures such as the Help to Buy programme.
Just at the weekend David Cameron brought forward the second phase of Help to Buy, which provides up to pounds sterling 12bn of taxpayer insurance to guarantee up to 15pc of a mortgage on houses worth up to pounds sterling 600,000, allowing banks to provide 95pc mortgages at reduced risk.
To guard against accusations this might start a house bubble, the Government has asked the Bank of England's Financial Policy Committee to review the scheme annually, starting next September.
These moves come against a backdrop of a steadily growing housing market.
Last week figures from the Nationwide Building Society suggested year-on-year house price increases in all regions of the UK in the third quarter of 2013 the first rise across the board for nearly six years.
Panmure Gordon said the estate agent can take advantage of a reactivated housing market.
The broker said: 'Countrywide is a play on the UK housing market which is now recovering from a six-year hiatus.'
Countrywide has around 1,300 branches throughout the UK under a variety of brands including Bairstow Eves, Hampton International and Gascoigne-Pees.
Countrywide makes 25pc of its sales in the more affluent London and south-east area of Britain.
The residential-focused business, led by chief executive Grenville Turner, has moved to diversify its position in the market. Last week it dipped its toe into the commercial property market, buying consultancy Lambert Smith Hampton for pounds sterling 34.1m.
Panmure added: 'Countrywide has also expanded its lettings business in order to exploit the continued strength of the private rental market.'
The fact that Countrywide is on the stock market at all is a reflection of the growth in this sector. The firm returned to the stock exchange in March, six years after being taken private at the peak of the market by US private equity group Apollo.
Fellow private equity firm Oaktree Capital later joined the business in 2009, when other buyout firms also bought into the firm.
Shares have risen about 48pc since its return to the market, and yesterday lifted 25p to 550p. Last week one of Countrywide's private equity backers Alchemy Partners sold its entire holding of 12.9m shares in the business for around pounds sterling 67m.
But Panmure Gordon still thinks the country's nascent economic recovery offers 'substantial upside in the shares'.
The FTSE 100 closed broadly flat, down 2.21 points at 6,460.01, as poor sales from Unilever hit consumer staples.
On Wall Street the Dow Jones Industrial Average added 62.03 points to 15,191.70 as investors bet the first partial US government shutdown in 17 years would have a limited effect on the economy.
The shutdown will cost the US at least pounds sterling 185m a day in lost output, according to research firm IHS.
That compares with America's annual pounds sterling 9.7 trillion economy.
Consumer goods giant Unilever slumped 82p to 2,358p, an 11-month low, after it said a slowdown in its emerging markets business had intensified. The firm cut its third quarter sales expectations.
Consumer staples such as Unilever had been the best performers in the stock market this year, up 20pc by July. This also led to a slide in other worldwide consumer goods firms listed in London.
Dettol-maker Reckitt Benckiser dropped 57p to 4,463p, while Peroni-brewer SABMiller slipped 88.5p to 3,055p.
Miners were also down as traders continued to react to poor Chinese factory output figures earlier in the week. Glencore Xstrata was down 6.2p at 330.5p, BHP Billiton lost 15p at 1,805p, while Rio Tinto fell 27p to 2,996p.
Barclays led the banking sector, up 4.3p to 269.8p, while Lloyds Banking Group added 1.06p to 74.64p.
Rolls-Royce rose 22p to 1,134p, after Bank of America said the aircraft-engine maker's share price is an attractive entry point.
Analysts at Panmure Gordon issued its quarterly top picks, and added housebuilder Bovis Homes (up 10p at 729p) to its list. AIM-listed miner Conroy Gold raised pounds sterling 1m via a share placing priced at 2.65p.
The goldminer ended the day 0.18p higher at 2.12p.