Oct. 09--Will we ever tire of talking about house prices? Today the City was back to one of its favourite subjects: Help to Buy and the housebuilders.
Goldman Sachs' experts ran the number on the likes of Persimmon and Crest Nicholson and decided it's still worth buying into the sector.
They noted that the "lead indicators" such as UK mortgage approvals and RICS Survey data strongly indicated a rebound in housing activity with "forward sales for UK housebuilders currently up around 50 percent" which is all in part "stimulated by the "Help To Buy shared equity scheme".
So Goldman's declared there will be a "meaningful transactions recovery from 2014" for the home makers.
Top pick for them was builder Taylor Wimpey which got added to the "Conviction Buy List" to join agent Rightmove and Persimmon.
Goldman's also rated Crest Nicholson (up 8.1p at 338.6p) and property agent LSL (up 6.81p at 457.31p) because both offer "leading cash returns relative to their peer groups". They also expect "strong margin expansion as a result of the recovering UK housing market".
Yesterday the second phase of the Government's Help To Buy scheme was launched and Goldman's decree sent Persimmon to the top of the table _ up 47p to 1124p. Over on the mid-tier table the housebuilders dominated the top 10 risers with Barratt Developments leading up 11.6p to 320.5p. Bellway built up a 40p gain to 1310p and Taylor Wimpey jumped 3.3p to 102p. However, Rightmove fell 14p to 2346p.
The FTSE 100 had a third day in negative territory with the FTSE 100 down 29.91 points to 6335.92. Traders were still concerned about the US shutdown and the looming debt issues. Alastair McCaig, market analyst at spreadbetter IG, said traders' "confidence that the US will get its act together is slowly turning into fear".
Retailer Marks & Spencer has faced a barrage of criticisms from analysts in the past few days but analysts at Nomura came out in favour today with a buy note and the retailer recovered 1.4p to 464.9p.
Miner Vedanta Resources was in a hole at the bottom of the blue-chip index and lost 47p to 1022p after a disappointing production update and Morgan Stanley analysts downgraded it to underweight. Mid-tier gold miner Centamin was 0.62p brighter to 45.7p after a strong quarterly production update.
Beer volumes and sales were up at brewer Marston's, pictured, and it improved by 5p to 146.5p.
AIM-listed Hutchison China MediTech was 35p healthier at 615p after revealing it had signed a licensing and co-development deal with Eli Lilly for its Fruquintinib oncology therapy for cancer in China.