Sector movers: Construction sector feels shockwaves from Kier caution
There was a late wobble for the construction sector, sparked by a statement from Kier alongside its plans for a rights issue, while property developers and housebuilding companies were also swathed in red.
In a mid-afternoon announcement, Kier said it had secured backing for a £264m rights issue to accelerate its debt reduction plans, with a 33-for-50 issue of shares priced at 409p, representing a 34% discount to the theoretical ex-rights price.
But the company's statement was what sent shock-waves through the sector. Directors warned of increasing risks around its level of debt, with a number of lenders indicating plans to reduce exposure to the construction and related sectors and that potential clients and customers are "increasingly" demanding service provider have a strong balance sheet. Kier said it had also received "increasing pressure" to shorten supply chain payment terms.
All of which combined to put pressure on the likes of Balfour Beatty, Keller, CRH and Ibstock elsewhere in the wider construction sector, as well as Capita as a fellow government contractor.
Brexit continues to weigh on the wider real estate and construction sectors, having been blamed for the withdrawal of a potential offer for Intu earlier in the week.
Residential-facing companies were dented by the latest survey from Nationwide on Friday, which revealed an uptick in annual house price growth in November but said the outlook was less than rosy.
Nationwide's chief economist Robert Gardner said: "Looking forward, much will depend on how broader economic conditions evolve. In the near term, the squeeze on household budgets and the uncertain economic outlook is likely to continue to dampen demand, even though borrowing costs remain low and the unemployment rate is near 40-year lows."
Top performing sectors so far today
Technology Hardware & Equipment 1,015.87 +1.74%
Mobile Telecommunications 3,762.41 +1.20%
Aerospace and Defence 4,628.91 +0.49%
Pharmaceuticals & Biotechnology 15,135.67 +0.42%
Fixed Line Telecommunications 3,037.38 +0.32%
Bottom performing sectors so far today
Construction & Materials 5,259.14 -2.54%
Real Estate Investment & Services 2,493.64 -1.49%
Industrial Metals & Mining 4,231.72 -1.48%
General Retailers 2,153.48 -1.46%
Oil Equipment, Services & Distribution 12,571.36 -1.45%
Market Movers
FTSE 100 (UKX) 6,983.41 -0.79%
FTSE 250 (MCX) 18,476.22 -0.71%
techMARK (TASX) 3,492.28 -0.08%
FTSE 100 - Risers
Centrica (CNA) 138.30p 1.58%
Smurfit Kappa Group (SKG) 2,160.00p 1.41%
Shire Plc (SHP) 4,539.50p 0.77%
Pearson (PSON) 967.40p 0.67%
Vodafone Group (VOD) 168.74p 0.58%
Direct Line Insurance Group (DLG) 328.80p 0.58%
BAE Systems (BA.) 493.10p 0.57%
GlaxoSmithKline (GSK) 1,606.00p 0.53%
RSA Insurance Group (RSA) 541.60p 0.33%
International Consolidated Airlines Group SA (CDI) (IAG) 627.60p 0.19%
FTSE 100 - Fallers
NMC Health (NMC) 3,308.00p -6.61%
TUI AG Reg Shs (DI) (TUI) 1,127.31p -5.74%
Melrose Industries (MRO) 176.50p -4.28%
Antofagasta (ANTO) 800.80p -4.26%
Persimmon (PSN) 1,890.00p -3.84%
Next (NXT) 4,873.00p -3.70%
Taylor Wimpey (TW.) 133.60p -3.57%
Sage Group (SGE) 584.40p -3.56%
Marks & Spencer Group (MKS) 292.70p -3.30%
3i Group (III) 831.00p -3.17%
FTSE 250 - Risers
Go-Ahead Group (GOG) 1,726.00p 4.23%
Plus500 Ltd (DI) (PLUS) 1,525.00p 3.95%
On The Beach Group (OTB) 418.50p 3.85%
IP Group (IPO) 118.40p 3.32%
Rank Group (RNK) 158.60p 3.26%
IntegraFin Holding (IHP) 303.10p 2.35%
Greene King (GNK) 548.11p 2.33%
Spirent Communications (SPT) 129.20p 2.05%
SSP Group (SSPG) 625.50p 1.92%
Rotork (ROR) 262.10p 1.91%
FTSE 250 - Fallers
Kier Group (KIE) 516.50p -31.36%
Thomas Cook Group (TCG) 31.02p -7.90%
Amigo Holdings (AMGO) 247.20p -6.08%
Balfour Beatty (BBY) 253.20p -5.31%
Capita (CPI) 103.95p -4.89%
Keller Group (KLR) 586.29p -4.51%
AA (AA.) 89.90p -4.50%
Quilter (QLT) 116.02p -4.43%
Spire Healthcare Group (SPI) 125.20p -3.91%
Ibstock (IBST) 213.40p -3.79%