Budget 2017: Stock Market Losers

Autumn Budget 2017: After chancellor Philip Hammond unveiled his Budget speech, we take a look at the stocks which are negatively impacted by his reforms

David Brenchley 22 November, 2017 | 4:03PM
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We round up the equity losers from Chancellor Philip Hammond's Autumn Budget 2017, with most of the slack being taken up by the housebuilders.


The housing shortage that has plagued successive governments was addressed, with Hammond abolishing stamp duty land tax for first-time buyers and pledging an average of 300,000 new homes per year by the mid-2020s.

However, while there was a pledge to build more homes, housebuilders were hit hard by the announcement of review into the practise of landbanking, which has seen listed companies building up their land reserves recently.

Hammond said that if the review, due to report at next year’s Spring Statement, “finds that vitally needed land is being withheld from the market for commercial reasons, we will intervene to ensure such land is brought forward for development”. He threatened compulsory purchases would be ordered if necessary.

Paul Spencer, manager of the Morningstar Silver Rated Franklin UK Mid Cap fund, says he feared Hammond would be too heavy-handed in this department. A faster planning process and greater availability of land would negate the need for housebuilders to have a four-year landbank, he explained.

Blane Perrotton, managing director of surveyor Naismiths, says the review suggests “the tide is turning against” developers. “If this government is genuinely going to make a difference to the level of housebuilding, the gloves need to come off – and you sense they are.”

All the listed housebuilders, including blue chips Barratt Developments (BDEV) and Persimmon (PSN) and smaller players like Bellway (BWY), were down between 1% and 3% in afternoon trading.


Hammond confirmed tobacco prices would continue to rise at inflation plus 2% and slapped an additional 1% duty on hand rolling tobacco this year. A minimum excise duty on cigarettes will also rise, he said.

The UK’s two blue-chip tobacco names, British American Tobacco (BATS) and Imperial Brands (IMB), saw their share prices pare back slightly, by 0.65% and 0.56% respectively. That said, their revenues largely come from abroad so the impact was less severe than it could have been.


This one could go either way. It’s been a tough few months for the airlines. They are locked in a price war currently and Brexit uncertainty is clouding the outlook for flights between the UK and European Union.

Hammond announced a freeze on air passenger duty, which will clearly benefit passengers. However, "whether it will feed through to airline profits is less clear", says George Salmon, equity analyst at Hargreaves Lansdown.

"Reducing the fixed cost base only increases scope for price cuts and that doesn't drive weaker players out of the market," he adds.

While easyJet (EZJ) was up today, that was probably an overspill from positive news yesterday where it announced record passenger numbers and rising revenues. The stock is up 7% since Monday. Ryanair (RYA), on the other hand, was down 1.3%.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Barratt Developments PLC506.80 GBX1.44Rating
Bellway PLC2,714.00 GBX1.12Rating
British American Tobacco PLC2,424.00 GBX-1.62Rating
easyJet PLC456.60 GBX-1.93
Imperial Brands PLC1,940.00 GBX-1.05Rating
Persimmon PLC1,471.50 GBX2.58Rating

About Author

David Brenchley

David Brenchley  is a Reporter for Morningstar.co.uk

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