...

FTSE higher in 2007 but credit crisis pares gains

Business Materials 1 January 2008 19:11 (UTC +04:00)

( FT )- Alliance & Leicester managed to buck the trend as London market drifted lower on the final trading session of 2007.

The mortgage lender was the second worst performer in the banking sector in 2007 year, losing 43 per cent. (The biggest faller was Northern Rock, which slumped 93 per cent).

However, A& L rallied 1.3 per cent to 648p on Monday amid speculation that it was the mortgage provider that Banco Santander , the Spanish owner of Abbey, considered buying last month. The talks stalled over price, according to a report in this paper.

Monday's other standout feature was Friends Provident. The life assurer gained 2.8 per cent to 163.4p on continued speculation that its strategic review - to be announced later this month - is likely to lead to a full sale of the company.

In the wider market, leading shares drifted lower in very thin trade. The FTSE 100 finished 20 points, or 0.3 per cent, lower at 6,456.9, dragged down by profit taking in the mining sector. The FTSE 250, meanwhile, improved 7.5 points, or 0.1 per cent, to 10,657.8.

During 2007, the FTSE 100 gained 236.1 points, or 3.8 per cent - its weakst annual performance since the bull market began in 2003.

The FTSE 250 fell 520 points, or 4.7 per cent over the year, while the FTSE All Share index advanced 65.3 points, or 2 per cent.

The best performer in the FTSE 100 in 2007 was Amec , the oil field services group, with a gain of 98.9 per cent.

The mining giant Rio Tinto , up 95.6 per cent to ?53.17, was not far behind after a bid from BHP Billiton (NYSE:BHP), up 65.4 per cent to ?15.46.

Oil and mining companies dominated the leaderboard in 2007, reflecting rising crude prices and confidence that the commodities supercycle has further to run.

The biggest fallers were in the housebuilders sector with Taylor Wimpey , off 52.3 per cent to 203.25p, and Persimmon, down 47.6 per cent to 800p.

Property stocks also stood out on the list of the worst performing shares as commercial rents came under pressure during the year. British Land lost 44.9 per cent to 945p whilst Land Securities fell 35.2 per cent to ?15.06.

Wolseley (NYSE:WOS), the supplier of plumbing and heating goods highly exposed to US markets fell 39.8 per cent to 742p on dollar weakness and its direct exposure to troubled American property market.

The best performing stock on the entire main market was Tradus , the online auction house, which climbed 183.7 per cent and the worst was Northern Rock followed by mortgage lender Paragon, down by 80 per cent.

Concerns over the outlook for earnings in the wake of the crisis in credit markets, as well as the uncertainty over the outlook for mortgage demand hit the banking sector hard. HBOS lost 35.1 per cent to 735p and other high street lenders were not far behind. Royal Bank of Scotland ended the year 33.2 per cent lower at 444p with Barclays (NYSE:BCS) 31 per cent weaker at 504p.

Back to Monday's market, retailers ticked higher amid reports of a post-Christmas surge in sales. Next added 1.2 per cent to 16.24, while Debenhams advanced 2.2 per cent to 80.25p.

The sector was also helped by a surprise trading statement from Game Group. Citing a strong sales performance over Christmas, the computer games retailer said it now expected full year pre-tax profits to exceed ?70m. Game shares rose 7.8 per cent to 250p.

Among the small caps, London Scottish Bank dropped 18.2 per cent to 63p after the consumer credit and debt collector warned of a charge of up to ?22m to cover bad debts and ?13m shortfall in its regulatory capital base.

Latest

Latest