Autumn Statement: Stock Winners and Losers

Brick makers, infrastructure companies, telecoms firms and estate agents all feel the impact of Philip Hammond's Autumn Statement

External Writer 23 November, 2016 | 2:40PM

Morningstar's "Perspectives" series features investment insights from third-party contributors. Here, Russ Mould, investment director at AJ Bell predicts the shares that will move as a result of the Autumn Statement. 

A projected total spend of around £10 billion on broadband, roads, railways, homes and innovation may sound like a lot – but compared to the UK economy of some £1.8 trillion is unlikely to provide a major lift to growth.

However, brick makers such as Ibstock (IBST) and Forterra (FORT) are likely to welcome the plan to spend £1.4 billion to deliver 40,000 affordable homes, above and beyond the £3 billion housing fund that has already been announced with a plan to “get Britain building”. The focus on affordable homes may be of less use to the large quoted housebuilders as average selling prices tend to be lower here. Property developers like MJ Gleeson (GLE), St Modwen (SMP) and Henry Boot (BHY) may also benefit as new sites are sought for fresh housing developments.

Infrastructure plays such as WS Atkins (ATK), Kier Group (KIE), Hill & Smith (HILS), Balfour Beatty (BBY) and Renew Holdings (RNWH) will doubtless welcome more spend on road and railways although the news has been so well trailered the stocks did little in the wake of the announcement.

Big Spend on Innovation

The £2 billion pot for research and development and innovation may fire investor enthusiasm for intellectual property incubators like Imperial Innovations (IVO) and IP Group (IPO), as well as venture capital trusts, as they seek to nurture the tech and biotech winners of tomorrow.

Shares in telecommunications systems testing expert Spirent (SPT) are up a fraction on Mr Hammond’s drive to promote the development and roll-out of 5G mobile services, while a £1 billion plan to unlock a ‘gold standard’ of superfast broadband for millions of British homes could bring some comfort to telecoms service providers, if it enables consumers to buy and download more readily. CityFibre (CITY)’s shares are up by some 4% while Sky (SKY), TalkTalk (TALK) and BT (BT.A) will be watching developments here with interest.

The biggest movers on the day, however, all look to be losers, in the form of the quoted real estate agents whose income is under attack from the Chancellor’s plan to abolish letting agent fees. Shares in Belvoir Lettings (BLV), Foxtons (FOXT), Countrywide (CWD), LSL Property Services (LSL) and Martinco (MCO) all found themselves out in the cold, with share price falls in the 6% to 8% range.

Despite the Chancellor’s decision to increase insurance premium tax shares in major insurers like Admiral (ADM), AA (AA.) and Esure Group (ESUR) look unmoved. Meanwhile Royal Bank of Scotland (RBS)’s stock drew little succour from the Autumn Statement’s small print, which disclosed that the Government is abandoning plans to sell down its stake in the near term. The shares fell 2.5% to 203p, way below the Government’s 503p a share average purchase price.

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Securities Mentioned in Article
Security NamePriceChange (%)Morningstar
Rating
AA PLC132.65 GBX-1.59-
Admiral Group PLC1,889.50 GBX-1.18
Atkins (WS) PLC  -
Balfour Beatty PLC282.90 GBX-1.26-
Barnes Group Inc58.67 USD-1.51-
Belvoir Lettings PLC103.84 GBX-3.40-
BT Group PLC217.14 GBX-0.74
CityFibre Infrastructure Holdings PLC  -
Countrywide55.64 GBX-29.12-
Esure Group PLC215.80 GBX-2.71-
Forterra PLC307.00 GBX0.49-
Foxtons Group PLC56.72 GBX-1.52-
Hill & Smith Holdings PLC1,464.00 GBX-2.53-
Ibstock PLC286.00 GBX-1.45-
Imperial Innovations Group PLC3.15 GBX0.00-
IP Group PLC128.00 GBX-1.08-
Kier Group PLC976.00 GBX-1.91-
LSL Property Services PLC260.00 GBX-0.38-
MJ Gleeson PLC766.00 GBX-3.53-
Renew Holdings PLC405.00 GBX2.53-
Royal Bank of Scotland Group (The) PLC257.20 GBX-1.64
Sky PLC1,413.00 GBX-0.14
Spirent Communications PLC119.20 GBX-1.00-
St Modwen Properties PLC416.80 GBX-1.51-
TalkTalk Telecom Group PLC111.60 GBX0.18-
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