Hopes of an interest rate cut lifted housebuilder shares in the first half of the week.
Despite calls by the Home Builders Federation for a cut of one percentage point, such a move was seen as desirable rather than likely in City circles. Most predicted a cut of either 0.5 or 0.75 percentage points.
Still, as a result of the speculation, Taylor Wimpey, Barratt and Persimmon bucked the trend of recent months and outperformed contractors Kier, Balfour Beatty and Carillion over the last seven days (see graph).
Taylor Wimpey was up 15% on Tuesday afternoon despite suggestions that short-sellers were dumping stock ahead of a cut. Chris Millington, an analyst at Numis Securities, said: “The price rise suggests buying rather than mass dumping.”
It helped the stock rise from an all-time low of 9p the previous week to 16p. The spectre of the refinancing deal still loomed large, though; it will be the only question on anyone’s lips when the housebuilder updates the market next Tuesday.
Balfour Beatty’s solid, if fanfare-free, trading statement provided some relief. Yet despite kind words from many about its long-term robustness, shares have still fallen 30% in the last two months.
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