FTSE in-depth: Savills soars as tycoons buy up
Super rich foreign buyers are pushing up house prices across Central London.
Geoff Foster: The Footsie dipped as investors took some money off the table.
Multi-million pound homes in Belgravia, Mayfair, Knightsbridge and Notting Hill are being snapped up by Middle Eastern and Russian punters who appear to be gradually taking over the capital.
You only have to walk down Kensington High Street these days to realise that. But upmarket estate agency group Savills is not complaining.
Its shares raced 13.5p ahead to 360.2p after the company forecast that pre-tax profits for the year to the end of December will be in excess of £40m.
That's impressive because when reporting a jump in first-half profits to £14.4m, from £100,000 in 2009, the board was particularly cautious about second-half prospects.
It shouldn't have been, as its London residential and UK commercial advisory businesses have performed strongly. Third-quarter revenue was 60% ahead of the same period last year.
Charlie Foster, analyst at Oriel Securities, had profits of £31.5m pencilled in for the full year and will be upgrading in due course. He said: 'Savills' performance is especially impressive in a market where its peers continue to struggle.'
Savills has predicted that London house prices will surge by up to a third by 2015 and the biggest increases will be seen in Kensington and Chelsea.
Rightmove, which only last week said that a record number of people were looking at the property website, added 3p to 794.5p. Panmure Gordon lifted its target price to £9 from £8.
The Footsie dipped 25.39 points to 5,849.96 as investors took some money off the table following last week's 3% surge, which greeted the Federal Reserve's decision to pump a further $600bn into the world's biggest economy to help stimulate the recovery. Wall Street lost 49 points in early dealings for the same reason.
Mobile phone giant Vodafone buzzed 1.1p higher to 175p on hopes today's interims will please. Chief executive Vittorio Colao in September sold a stake in China Mobile for £4bn and is reviewing stakes in French mobile phone company SFR, and US operator Verizon Wireless.
He is also believed to be considering a sale of Vodafone's shareholding in Polkomtel, Poland's biggest mobile phone operator.
Vodafone currently does not receive any dividends from its major stake in Verizon Wireless. Verizon has said it will review the situation in December. Shareholders would love to see Colao unload it and put the cash to better use.
Amid growing concerns about Ireland's financial plight, banks took a turn for the worse. Part-nationalised Lloyds Banking Group closed 1.18p lower at 68.65p, while Royal Bank of Scotland fell 1.36p to 43.64p despite a Standard & Poor's upgrade to buy from hold.
It says the bank is making good progress in reducing non-core assets, while also improving its funding profile. Its 12-month target price is 57p. Barclays lost 4.2p to 285.7p ahead of today's trading statement.
On hearing that gunmen in Nigeria had attacked an offshore oil rig operated by Afren, kidnapping five crew members, investors ran for the exit and shares of the exploration firm closed 7.2p lower at 124p.
The attack was in the shallow-water Okoro field off Akwa Ibom state, Afren's biggest producing oilfield with an average output of 17,300 barrels per day. Drilling operations have been temporarily suspended. News that Irish racing tycoons John Magnier and JP McManus had increased their stake in Mitchells & Butlers slightly to 18% via their investment vehicle Elpida, left the pubs group as flat as a pint of home-made scrumpy at 347.4p.
Further speculative buying of Parkmead, 2.63p, or 39%, better at 9.38p, reflected hopes that new chairman Tom Cross will replicate the spectacular success he had at Dana Petroleum.
He trousered a small fortune and walked away from Dana after selling the company to Korean state-backed firm, KNOC.
MBL Group, a distributor of home entertainment products, soared 19.5p to 116p. It has signed a two-year agreement with supermarket giant Sainsbury's to provide and support a website through which entertainment products are sold directly to customers. The new site was launched on Friday.
Reports that management will be making presentations to Swedish investors this week helped Beowulf Mining jump 6p to 30.25p.
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