UK Home Prices Drop, Aggreko Surges

123jump.com Staff
23 Jun, 2008
New York City

The Brent Crude oil prices rose, home prices in the month fell and stocks in trading edged slightly higher. UK home prices fell 1.2% in the month after more sellers list homes for sale and inventory rose to a record level. The Brent Crude oil rose 2% in trading after Nigeria reported oil production declined to a 15-year low. Aggreko, power equipment rental company surged 10% after it issued earnings estimate.

[R]2:00PM New York, 7:00PM London- UK house prices fall 1.2% in June.[/R]

Stocks in London rose fractionally as rising crude oil prices rose and UK home prices dropped 1.2%. Aggreko surged 10% after it issued upbeat first earnings estimate.

Market sentiment

In London trading FTSE 100 rose 0.83% or 46.4 at 5,667.20. Of the FTSE 100 index stocks 57 gained, 44 declined, and 1 was unchanged. Invensys Plc led advancers in the index shares with a rise of 6.04% followed by Shire Ltd gaining 5.71%.

House prices fall 1.2% in June

Rightmove Plc reported today on its Website that the average national asking home prices declined 1.2% to £239,564 in June from the previous month.

Average unsold stock per estate agency branch rose to 75 homes per branch from 73 in the previous month, record level of inventory since Rightmove began collecting data.

According to the report, the widening gap between some sellers’ asking price aspirations and what buyers are willing to pay “is one of the factors behind the illiquid property market and low volumes of transactions”.

Asking prices are likely to fall further as the cost of living increase faster than wage gains.

Commercial director of Rightmove Miles Shipside said, “In spite of the lowest housing transactions for 30 years, new sellers had been coming to the market asking record prices. It was a mad state of affairs that defied laws of economics. Thankfully new sellers are now taking some proactive steps to price more realistically from the outset to attract increasingly hard-pressed buyers”.

Aggreko surges on earnings estimate

Aggreko plc, the world’s largest mobile power unit rental services provider estimated that first half revenue will rise 25% and earnings may surge 40% than a year ago. Revenue in constant currency is expected to rise 22% from a year ago.

The company rents mobile power generating units, compressed air equipment and temperature control equipment to Beijing Olympics and other industrial and construction projects. The company expects to deliver 140 MW of power to 37 venues at Beijing Olympics and has been selected for 2010 Winter Olympic and Paralympic Games.

Gainers & Losers

Invensys Ltd led advancers in the FTSE 100 index shares with a rise of 6.04% followed by gains in Shire Ltd of 5.71%, in Thomson Reuters of 3.69%, in Tullow Oil of 3.36%, and Compass Group of 3.14%.

Shire rose after Goldman Sachs upgraded the stock to “buy” from “neutral”.

Tullow Oil and other energy stocks increased after crude oil for August delivery edged up 1.6% to $137.50 a barrel on news that Nigeria’s production is now at a 25-year low at 1.5 million barrels a day because of attacks on production facilities.

Other energy stocks advanced as well. Royal Dutch Shell jumped 1.88% and BP Plc climbed 1.82%.

Land Securities Co. led decliners in the FTSE 100 index shares with a drop of 4.8% followed by losses in HBOS Plc of 4.25%, in Old Mutual Plc of 3.56%, in Wolseley Plc of 3.37%, and Antofagasta of 3.01%.

Land Securities plunged as HSBC Holdings downgraded the company to “underweight” from “neutral”.

Homebuilders fell as well. British Land Co. slumped 2.74% and Hammerson shed 1.47%.

Financial stocks also declined. Barclays shed 2.8%, Lloyds TSB Group plummeted 2.7% and Royal Bank of Scotland 2.2%.