Market Report: OneSavings Bank bounces back after buy-to-let sell-off

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Investors who dumped shares in OneSavings Bank as part of the buy-to-let stock-market sell-off were too hasty.

That’s the view of Investec’s banking analyst Ian Gordon, who reckons the mortgage lender’s share price already reflected the City’s expectations that “cooling measures” would be introduced at some point.

Gordon said: “As to what impact yesterday’s Autumn Statement has had on our earnings forecasts, the simple answer is zero.”

The FTSE 250 group, which along with other challenger banks retreated as the Chancellor slapped a 3% stamp duty surcharge on buy-to-let properties, rallied 16.4p, or 4.8%, to 357.7p as Gordon upgraded the stock to buy.

Other challenger banks also recovered, with Shawbrook up 1.5p to 330.5p and Virgin Money 2.74p better off at 360.64p.

However, Aldermore slipped 3.5p to 241.5p after Deutsche Bank downgraded to hold, concerned by the prospect of more regulatory change in the buy-to-let market.

A rise in commodity prices boosted oil and mining stocks, driving the  FTSE 100 up 22.57 points to 6360.21, with Wall Street shut for Thanksgiving.

Mike McCudden, head of derivatives at stockbroker Interactive Investor, said: “With the US on holiday and a rate hike priced into the market for next month, attention lies squarely on the eurozone as investors debate how effective the next round of anticipated monetary easing will be.”

Shares in Daily Mail & General Trust picked up 26.5p to 695.5p as the publisher sold a 70% stake in voucher site Wowcher to Exponent Private Equity and bought the UK and Ireland business of rival deal site LivingSocial.

DMGT will pocket £29 million from the double-deal.

Supermarket till operator PayPoint plunged 83.02p to 909.48p after writing off £18 million on the value of its online-payments business, for which it has failed to find a buyer.

On the junior market, Alliance Pharma, which licenses approved drugs that major manufacturers no longer want, dipped 4.5p to 46.5p after striking a deal to buy the dermatology business of Sinclair IS Pharma, which jumped 3p to 38.75p.

The £132 million deal, which will be funded by new loans and a share placing raising £78.5 million at a 20% discount to yesterday’s share price, is worth more than Alliance’s entire market value.

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November 26, 2015 |
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