The housebuilding sector has taken a hit today, following a downbeat note from ABN Amro.
Analysts at the bank point to a weaker trading outlook for the sector. "A significantly restricted UK mortgage market and weakening consumer confidence should lead to a continuation of the poor trading conditions experienced by the UK housebuilders in recent months."
They predict reduced forward order books and lower sales rates resulting in large volume falls, together with a 5% price deflation. This leads to
earnings cuts of 19% in 2008 and 30% in 2009 - 24% and 37% below consensus
respectively.
The downbeat note has impacted housebuilding stocks substantially. Persimmon has closed down 33.5p at 651.5p, and Taylor Wimpey has fallen 8.7p to 171.1p. Over on the FTSE 250, Barratt Developments is down 24.2p at 362p, and Redrow has dropped 14p to 272p.
But the bad news has not stopped the FTSE 100 from rising 20.8 points to 6356.5, helped by the miners and pharmaceutical companies. The miners today benefited from higher metal prices, and the drug firms are benefitting from investors piling into defensive stocks as concern grows over the state of the global economy.
