Deutsche Bank have downgraded a swathe of UK housebuilders as it suggests a lot of the positive news around the UK property market is priced into shares.

Enjoying mildly improving sentiment around the UK property market, London-listed housebuilders have staged a remarkable rally from last year’s lows.

However, analysts at Deutsche Bank now feel most of the good news is priced into the sector and have downgraded Barratt Developments, Redrow, Taylor Wimpey, Crest Nicholson Holdings and Persimmon.

All were cut to a hold from buy, apart from Persimmon which was cut to a sell.

Persimmon shares were down 2.8% at the time of writing on Monday.

Housebuilding shares fell heavily during the early stages of 2022 before bargain hunters stepped in to pick up the beaten down stocks on hopes the UK economic doomsday scenario would fail to transpire.

Barrett’s recently reported results for 2022 and said forward sales were dramatically lower than at the same point last year.

DX Group shares were falling on Monday after the logistics group responded to a Sunday Times article alluding to a corporate espionage case involving rival Tuffnell Parcel Express.

This morning, DX Group confirmed they had received a claim 10th February and would ‘defend its position robustly. It is alleged DX Group staff attempted to obtain commercially sensitive information from delivery drivers.

DX Group shares were down 7.5% at the time of writing.

DX Group Corporate Governance

The media reports over the weekend and claim from Tuffnells comes after DX Group conducted internal investigations last year and made sweeping changes to their management structure and took disciplinary action against employees.

“Industrial espionage has rarely sounded more prosaic although the consequences for delivery and logistics firm DX, if the claims from Sheffield-based rival Tuffnells are proven at the High Court, could be anything but,” said AJ Bell investment director Russ Mould.

“According to newspaper reports DX employees, formerly of Tuffnells, conspired to obtain customer service receipts from the latter. The £50 payments offered to ‘Pat’ the delivery driver in exchange for the confidential corporate information make it sound like an off-the-wall episode in the life of Greendale’s favourite postie.”

“DX has put out the expected robust defence and the company has already conducted a corporate governance investigation into the matter which resulted in a shake-up of its senior management and a long suspension for the shares.”

“The company desperately needs to move on from the scandal and continue to capitalise on the progress it made during the pandemic when there was a sizeable increase in demand for parcel deliveries. Previously the company had a chequered history as a listed firm, littered with profit warnings and dividend cuts, so it is important to clean up this mess as soon as it can.”   

The company is set to release interim results 27th February.

Panther Metals shares fell on Friday despite announcing the completion of the disposal of their Big Bear project through the IPO of Fulcrum Metals.

Panther Metals shares were trading at 4.25p at the time of writing, down 1%.

Under the terms of the deal, Panther Metals will retain a 2% smelter royalty for the Big Bear project and will receive £200,000 in cash from Fulcrum. 

“Over the past three years since we listed, over a challenging market and over a period of global turmoil, Panther Metals have accomplished much in the relatively short space of time. We have built-up and divested assets in Canada and Australia to allow us to create value and broaden our reach whilst not destroying our capital structure,” said Darren Hazelwood, Chief Executive Officer at Panther Metals.

Panther Metals will have a 20% interest in Fulcrum Metals, worth £1.745m at the placing price.

Fulcrum Metals will begin trading on London’s AIM next week with the admission price set at 17.5p.

It has been confirmed the UK is not in a recession. UK growth was completely flat in Q4 2022 after contracting in 0.2% in Q3. The flat growth rate means the UK has avoided a technical recession of two quarters of contracting GDP.

There was initial mild strength in the pound on the news and the inverse relationship with the FTSE 100 kicked in, sending the FTSE 100 back beneath 7,900. As the session progressed, the pound weakened against the dollar, but didn’t provide any reprieve for stocks.

“News that the UK has managed to avoid being in a technical recession gave a small lift to the pound, putting it briefly at $1.2130, but still some way off the $1.2434 level seen in January. Zero GDP growth is hardly a reason to celebrate, and markets are certainly not jumping for joy,” said Russ Mould, investment director at AJ Bell.

“The FTSE 100 slipped back 0.3% as a stronger pound is bad for the large number of companies which earn in US dollars but whose share prices are sterling-denominated. Miners certainly fall under this category and the broader basic material sector was down in the dumps on Friday.”

The FTSE 100 shied away from 8,000 and was trading down by 0.6% to 7,860 shortly after lunch on Friday. The FTSE 100 is up 5.5% so far in 2023 while the mid cap FTSE 250 is up 6%. London’s AIM has gained 5% in 2023.

Standard Chartered

Standard Chartered was one of the casualties on Friday after the First Abu Dhabi Bank ruled out a takeover of the emerging markets focused institution.

“First Abu Dhabi Bank PJSC notes the recent press speculation in relation to Standard Chartered and re-iterates that it is not evaluating a possible offer for Standard Chartered,” First Abu Dhabi Bank said in a statement.

BP & Shell

On a day 90% of the FTSE 100 constituents were trading in the red, BP and Shell provided some support for the index as oil prices rose.

BP and Shell have both reported bumper profits in recent weeks with high levels of cash generation. Investors are clearly positioning for increased distribution of this cash in the future.

Morgan Stanley cut Shell to underweight with a 2,625p price target on Friday.

BP shares were the FTSE 100’s top gainer at the time of writing on Friday as the oil major continued to enjoy the impact of a bumper 1,000p price target and higher oil prices.

The BP share price had gained an additional 4% to 569p on Friday morning and was trading at the highest level since 2019.

BP’s strength builds on gains earlier in the week following the confirmation of bumper 2022 earnings and increased distributions to shareholders.

The oil major hiked their dividend to 6.6 cent for the last quarter and announced a $275bn share buyback programme.

“With so much cash being generated, BP has followed Shell in hiking its dividend, with the final payment for Q4 rising by another 10% to leave it 21% above the equivalent payment last year. If that sounds like a big jump, remember that the company slashed its payout back in the pandemic and the new level is still 40% below where it stood in Q4 2019,”said  Steve Clayton, Fund Manager at HL Select.

BP Clean Energy

However, as the oil company announced record earnings, they also said their commitment to clean technology and lower emissions would not be as rigourous as previously expected. BP said they now plan to cut emissions by 20-30% by the end of this decade, instead of 35%-45%.

This will be a concern for environmentalists and anger some politicians who feel BP should be investing their profits into low carbon solutions.

Though it appears the short term focus on hydrocarbons, and provision of immediate shareholder returns, is pleasing investors and has earned BP shares a 1,000p price target from Barclays analysts.