For a moment it, appeared that investors’ concerns around Rightmove and its position as Britain’s market-leading property search website may have eased. The shift in sentiment came as Berenberg became the latest broker to say that the recent sell-off, sparked by CoStar, the American property company, swooping on its smaller rival OnTheMarket, had been overdone.
Analysts at the German bank pointed out that other competitors such as Purplebricks, Zoopla and Boomin have tried and failed to take share from Rightmove. They reckon CoStar will be no different.
“For a challenger to disrupt such a scaled platform like Rightmove, it would need to offer something materially different to convince buyers and agents to switch in significant numbers,” they said. “We do not think of CoStar’s acquisition offers anything different to previous challenges to Rightmove.”
Seeing the shares wallowing at 12-month lows, they argued that the present price offered an attractive entry point. Though the market initially heeded the bank’s advice, with Rightmove moving to the top of the FTSE 100 risers’ board during intraday trading, it seemed that investors’ fears hadn’t truly been assuaged as the shares closed broadly flat at 480½p, up a mere 0.3 per cent, or 1¼p.
The wider market began the week with a spring in its step as investors’ appetite for risk was bolstered by strong corporate updates. The FTSE 100 bounced off two-month lows, rising 36.11 points, or 0.5 per cent, to 7,327.39 and the FTSE 250 added 151.36 points, 0.9 per cent, to 17,017.59.
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Airtel Africa shot up 5p, or 4.6 per cent, to 115p as the mobile phone masts operator lifted its interim dividend. Following close behind was Pearson, the education group, which was marked up 27p, or 2.9 per cent, to 946¼p as a profit upgrade cheered the market. Defensive favourites such as tobacco and consumer goods groups were in high demand, with Imperial Brands rising 34p, or 2 per cent, to £17.63 and its rival British American Tobacco up 46½p, or 1.9 per cent, at £24.49½.
Shares in a couple of London’s big engineers were powered up as Liberum started coverage of the stocks with bullish “buy” recommendations. Smiths Group advanced 30p, or 1.9 per cent, to £16, while Renishaw improved 96p, or 3.3 per cent, to £30.46 as the analysts believe that the FTSE 250 engineer has experienced the worst of the headwinds of the past 18 months.
Bargain-hunters swooped on CAB Payments, which had plummeted more than 70 per cent after last week’s profit warning. The shares recovered 7¼p, or 15 per cent, to reach 54¾p. The only FTSE 250 stock flying higher than that was Ascential, which rose 49½p, or 22.9 per cent, to 265p after the company agreed to sell its digital commerce and consumer research units for a combined enterprise value of £1.4 billion.
Elsewhere, Foresight Group rallied 28p, or 8.5 per cent, to 358p after the investment manager, which is focused on renewable energy, started a £5 million share buyback.
Some of the big banks failed to join in the wider market rally. HSBC fell 13¾p, or 2.3 per cent, to 587¼p and NatWest gave up 3¾p, or 2.1 per cent, to 178¼p.
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Off the main market, all eyes were on Inspecs Group after the maker of glasses frames and lenses reported “solid” revenue growth of 4.6 per cent in the nine months to the end of September and smaller debts. The group’s shares closed up 7p, or 10 per cent, at 77p.
Wall Street report
Indices had a positive start to the week with a flurry of positive company earnings updates and ahead of the Federal Reserve’s rate decision tomorrow. The Dow Jones industrial average rose 511.37 points, or 1.6 per cent, to 32,928.96.
