Newspaper article The Evening Standard (London, England)

Property Falls Eject Top Builder from the Footsie

Newspaper article The Evening Standard (London, England)

Property Falls Eject Top Builder from the Footsie

Article excerpt


TAYLOR Wimpey's fall from grace among stock-market investors will be completed by the close of business tonight when its shares drop out of the Footsie 250 index.

It comes just 10 months after the shares were relegated from the bluechip Footsie 100 index.

The move will round off a miserable year for shareholders of the debt-laden housebuilder, who have seen the value of their investment collapse along with the housing market in the UK.

Its shares started the year at 2021/4p, valuing the entire group at [pounds sterling]2.13 billion.

Today, they were changing hands 0.07p higher at just 9.94p, valuing the company at just over [pounds sterling]100 million.

Taylor Wimpey has been forced to write off large chunks of the value of its remaining portfolio of unsold homes, and its land bank, as their value plummets along with that of the rest of the property market.

Meanwhile, it continues to stagger under the weight of [pounds sterling]1.8 billion of debt, about which it is currently in talks with its bankers.

Shares generally rallied strongly from opening falls, still comforted by president-elect Barack Obama's plans for fiscal stimulus of the US economy. That enabled City investors to shrug off the continued deterioration in retail sales and evidence of the biggest slump in manufacturing output for 30 years.

The FTSE 100 index extended yesterday's lead with a rise of 17.9 to 4318.0, having briefly touched a low for the day of 4232.6 in thin trading. The FTSE 250 climbed 146.1 to 6094.8.

Credit Suisse brought investors some seasonal cheer today by taking an upbeat view of prospects for 2009.

It remains "small overweight" on equities, having upgraded in October because low interest rates offer "oncein-50-years value". It adds that shares also offer good value for money and that with all policymakers in panicresponse mode there are opportunities to be had.

Robert Buckland at Citigroup is also optimistic about 2009, saying: "We believe macro fundamentals will determine equity-market performance." He is looking for recession and reflation rather than depression and deflation, and adds: "Ultimately, this should be positive for equities and other riskasset classes. …

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