Barclays Share News (BARC)

LONDON (Alliance News) - UK property companies are flavour of the day Monday, with commercial property trusts performing well on the back of strong results from Hammerson and housebuilders doing well after Rightmove reported a further surge in house prices.

Hammerson is the top gainer on the FTSE 100 after the real estate investment trust reported an increase in profit and rental income for 2013 as demand for its properties stayed strong. British Land and Land Securities have also risen on the back of the results.

Hammerson, which is now focused on retail properties in the UK and France, posted pretax profit of GBP326.3 million for the year, up from GBP93.5 million in 2012, boosted by revaluation gains of GBP90.3 million. In the corresponding period, the company was hit by revaluation losses of GBP49.9 million.

Chief Executive David Atkins said the company is beginning to see an economic and consumer recovery in the UK and improved demand for property from retailers, although he warned that the economic picture in France "is less clear cut". The UK recovery means Hammerson is better able to push up rents.

Liberum analyst Jon Steward called Hammerson the best play on the UK economic recovery within the real estate investment trust sector, noting that it is trading at a discount to peers.

Housebuilder Persimmon is also among the top gainers in the FTSE 100, while peers including Taylor Wimpey, Berkeley Group and Barratt Developments are among the biggest risers in the FTSE 250.

The moves come after Rightmove said the average asking price for a house in the UK was up 3.3% on month in February, accelerating from the 1.0% increase in January. On a yearly basis, house prices surged 6.9%, accelerating from the 6.3% jump in the previous month and marking the largest annual jump since February 2007.

Over the weekend, Bank of England Governor Mark Carney again said the central bank was keeping a close eye on the rise in house prices and will state "clearly and publicly" if it becomes uncomfortable with the government's Help to Buy scheme. The mortgage guarantee scheme is being cited as a key driver in the accelerating recovery, but Carney's comments suggest the bank is ok with the rate of recovery so far.

Carney also told the BBC's Andrew Marr that there was little the bank could do to cool the recovery in London, where prices are rising at the fastest rate in the UK. He blamed foreign property investors for driving London prices higher.

The FTSE 100 is up over 1% Monday morning on the back of strong individual and sector performances, even though there is a lack of economic data to drive sentiment and as US investors are sidelined by the President's Day holiday.

Precious metals are also continuing to perform well as the US dollar continues to come under pressure. The gold price peaked in early trade at USD1,329.72 per ounce, a 15-week high, while silver pushed to a three-month high at USD21.975 per ounce.

Sentiment among investors has improved noticeably of late, Commerzbank analysts said in a note to clients. In the week to February 11, net long positions in gold hit a 14-week high of 52,100 contracts, while silver net long positions increased more than four-fold to 10,000 contracts. This points to further price rises in the short term, says the bank.

In Europe, Florence Mayor and centre-left leader Matteo Renzi has been asked by Italian President Giorgio Napolitano to form a new government, the country's fourth in two years. Renzi has promised to accelerate economic and political reforms after ousting party colleague Enrico Letta from the premiership. At 39, he will be Italy's youngest-ever head of government, beating by a few weeks Fascist dictator Benito Mussolini.

Meanwhile, German Chancellor Angela Merkel has said the EU needs to work towards creating a regional communication network that circumvents the US. As a part of her weekly podcast, Merkel said she will talk to French President Francois Hollande during an upcoming visit to Paris about building a European communication network so that citizens' emails and other data does not pass through US servers.

Eurozone finance ministers are set to consider Monday the way forward on a controversial scheme to wind down troubled banks in the currency bloc, with the clock ticking on the much-touted measure. The EU's finance ministers hammered out a compromise on the scheme in December, but a deal now has to be struck with the European Parliament, which is unhappy about the ministers' approach.

EU ministers are also due Monday to approve the suspension of most sanctions against Zimbabwe, although those against President Robert Mugabe will remain in place, diplomats said.

The UK isn't the only country being hit by extreme weather, with the effects of the jet stream's current strength and positioning being felt in countries including the US and Indonesia.

Monday it was Japan's turn, as parts of the country were nearly brought to a standstill by heavy snow that fell over the weekend, causing up to 16 deaths and leaving more than 1,000 injured, the government said. Weather authorities said the disruption from the snow would continue in northern areas on Tuesday.

In Thailand, anti-government protesters on Monday walled shut the gates to Government House to prevent caretaker Prime Minister Yingluck Shinawatra from returning to the seat of her administration. Hundreds of protesters marched on Government House and erected walls in front of the compound's two main gates, in a bid to prevent the prime minister from returning to the government's main offices on Wednesday, Blue Sky TV reported. Suthep Thaugsuban, who heads the People's Democratic Reform Committee that has been staging protests in Bangkok for the past three months, led the march on Government House.

Meanwhile, US Secretary of State John Kerry has accused Syrian President Bashar al-Assad's government of obstructing peace talks aimed at ending the civil war. "The regime stonewalled. It did nothing but continue to drop barrels of bombs on its own people," Kerry said after talks in Jakarta with his Indonesian counterpart Marty Natalegawa.

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FTSE 100: up 1.1% at 6,735.32
FTSE 250: up 0.6% at 16,206.93
AIM ALL-SHARE: up 0.3% at 878.26
GBP-USD: 1.6718
EUR-USD: 1.3698
GOLD: USD1,327.15 an ounce
OIL (Brent): USD109.05 a barrel

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KEY UK CORPORATE NEWS:

FTSE 100: Capita said it has won a GBP325 million contract to deliver a single shared IT network for all public sector organisations within Scotland. The nine-year deal will see more than 4,600 sites be connected to the network, including schools, hospitals, GP surgeries and local council offices. IMI shares rose sharply after it consolidated its share capital, part of a return of GBP620 million in cash to shareholders from the proceeds of the sale of its beverage dispensing business. Action Hotels has partnered with Whitbread to further develop the latter's Premier Inn brand across the Middle East, with hotels under the partnership opening in cities including Dubai and Bahrain. Under the deal, Premier Inn, which was established by Whitbread in 1987, will undertake long-term management contracts on four new Premier Inn hotels owned by Action Hotels. Lloyds Banking Group is pushing for softer treatment from the regulator on new “ringfencing” rules as it fears it will otherwise have to shut down investment banking activities, The Financial Times reports. British American Tobacco today launches a marketing campaign for its new e-cigarret Vype, meaning an advert from a large tobacco company will appear on British TV screens for the first time in more than two decades, the Financial Times also reports. The UK's Serious Fraud Office has commenced criminal proceedings against three former employees at Barclays - Peter Charles Johnson, Jonathan James Mathew and Stylianos Contogoulas - in connection with the manipulation of Libor.

FTSE 250: Utility services company Telecom Plus, which trades as Utility Warehouse, said it plans to increase its total dividend for the year by 13% to 35 pence, from 31 pence, as it expressed confidence in meeting full-year expectations after another strong rise in customer numbers. Fidessa Group posted an increase in 2013 pretax profit as it booked a property sale gain, while underlying profits declined and revenues stayed flat. It said it expects to see a reduction in "headwinds to the business," during 2014, but it is likely to be hit by continued attrition, meaning revenues will only grow moderately at constant currencies. However, to demonstrate its confidence for the future, the firm is making a fifth special dividend payment in a row, of 45 pence a share. Galliford Try said it has been appointed preferred bidder for a GBP41 million residential contract to develop Westfield House in Earlsfield, south west London. Essar Energy's majority shareholder has made a 70 pence a share bid for the shares in the company it doesn't own, as it strives to take the company private less than four years after it listed a chunk of the business. Kazakhmys said it will raise the salaries of its operational staff in Kazakhstan by up to 10% from April 1 to protect them from some of the recent devaluation in the Tenge. In a statement, the company said the decision to raise the salaries comes after talks with the Government of Kazakhstan at which it was agreed that salaries at major exporting companies will have a managed increase in order to protect workers from some of the impact of the 20% devaluation in the country's currencies. DCC Group said its SerCom and Healthcare divisions performed well in the fourth quarter but has reduced its growth expectations for the full-year after its Energy business continued to be impacted by mild weather.

AIM: Sunrise Resources shares are up after the diversified mineral exploration development company expanded its project portfolio with the acquisition of two groups of mineral claims in Nevada, USA. Mariana Resources is up after it reported that it had seen positive results from channel sampling and mapping at the gold-silver-copper Soledad prospect in Peru. Mariana said sampling had returned positive high-grade gold and silver assays from five of the breccia pipe zones sampled. Mariana also confirmed the safety of one of its field contractors after he was abducted last week from the Los Naranjos area. At the other end of the market, Getech Group is down sharply after it warned that it expects first-half revenue and pretax profit to be down on the year due to "irregular purchasing patterns" from its customers. It expects revenue for the six months to end-January to be GBP3.0 million, down from GBP3.9 million in the previous year. As a result, pretax profit will be "substantially lower" than the GBP1.4 million it posted in the previous year. Goldplat is also down after it warned that its operating profit in the current financial year will be "materially" below the profit it reported last year because its Goldplat Recovery Ltd gold recovery plant in South Africa was hit by lower gold prices and lower grade recoveries during the fiscal first half.

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AFTERNOON WATCHLIST: US President's Day

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Tuesday's Key UK Corporate Events

Drax Group Preliminary Results
Brammer Preliminary Results
John Wood Group Full Year Results
AZ Electronic Materials Full Year Results
Morgan Sindall Group preliminary Results
BHP Billiton Interim Results
InterContinental Hotels Group Preliminary Results

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Tuesday's Key Economic Events

All Day EU EcoFin Meeting
03:00 Japan BoJ Interest Rate Decision
03:00 Japan BoJ Monetary Policy Statement
09:00 EU Current Account
09:30 UK Core Consumer Price Index
09:30 UK DCLG House Price Index
09:30 UK Producer Price Index
09:30 UK Retail Price Index
10:00 Germany ZEW Survey
10:00 EU ZEW Survey
13:30 US NY Empire State Manufacturing Index
13:55 US Redbook index
15:00 US NAHB Housing Market Index

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By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
By Alice Attwood; aliceattwood@alliancenews.com; @AliceAtAlliance

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