Upbeat Home Front Spurs Punters to Raise the Roof; MARKET REPORT

Article excerpt


WHAT a week it's been for happy housebuilders. Chancellor Gordon Brown laid the foundations for a sharp upwards movement on Wednesday by freezing stamp duty in his Budget.

He then threw his considerable weight behind Kate Barker's report calling for an extra 120,000 homes to be built in England each year to bring UK house price inflation down to Continental levels. And there was more bullish talk yesterday.

Buyers raised the roof after Paul Tucker, a senior member of the Bank of England's Monetary Policy Committee, said he does not see a collapse in house prices and broker Numis reiterated its forecast of a sector takeover spree over the coming months.

Persimmon, the UK's second-biggest housebuilder, climbed to 6901/2p before closing 281/2p better at 680p.

Numis upgraded its current-year pretax profit forecast by [pounds sterling]30.3m to [pounds sterling]410m and next year's by [pounds sterling]28.7m to [pounds sterling]428.7m, moved from hold to add and said it could easily make a sizeable acquisition.

Persimmon fuelled speculation of an early acquisition by appointing Citigroup Global Markets as financial advisers to work alongside ABN Amro Hoare Govett.

Dealers speculated that Persimmon could have Westbury, 28p better at 505p, or Bovis Homes, 30p up at 595p, on its radar screen.

Meanwhile, Barratt Developments rose 261/2p to 6011/2p, Bellway 16p to 807p, Berkeley Group 381/2p to 1005p, Redrow 221/4p to 406p and Wilson Bowden 37p to 1166p.

As dealers waited for confirmation that Osama Bin Laden's right-hand man, Ayman al-Zawahri, had been capturedon the Afghanistan-Pakistan border, the Footsie edged nervously higher.

It took the potentially dangerous early double-witching expiry of Footsie futures and options in its stride and closed 19.8 points up at 4417.7, but still a further 49.7 points lower on the week.

Wall Street lost an initial 17-point gain to trade 43 lower after reports of a bomb threat on Washington DC sparked nervous selling.

Replacement hip and knee group Smith & Nephew skipped 201/2p ahead to 5383/4p on reports of a pending bullish circular. …