Positive news on housing continues

April 3rd, 2009 by admin | Filed under Daily News, Global Credit Crisis, Mortgages, Recession.

The warm glow coming from the G20 conference and news that house prices are beginning to rise for the first time in over and against all predictions, combined to create an atmosphere of confidence that looks like it will continue to gain impetus. While the end of the recession still seems very far away, there is no doubt that it has bottomed out. From this point, the only way is up, and the question that will be asked is not “if” but “when” the recession will end.

The general re-organisation in banking circles has begun to take effect, and more and more credit is being released both the public as well as the business sector over the coming months.

One bank that seems to have sailed quietly through the turgid seas of the recession is the Co-operative Bank. While others were reporting losses running into billions, the “Cop” increased their profits by a tidy 70 per cent, up £35 million to £85.6m in 2008. Deposit balances rose to £14.6bn and lending to £12.2bn.

On the other side of the coin, as has been well reported, the RBS had a very bad year, and their new chairman, Sir Philip Hampton will be facing the bank’s shareholders at their annual meeting. Sir Phillip is expected to ask shareholders to draw a line under the past and ask for support in handling the multi-faceted challenges facing the bank.

On the FTSE, after the results of the G20 began to trickle through, banks and commodities showed major improvements. HSBC rose by 11.8% (48.25 pence to 459) In their wake were RBS who gained around ten percent. (3 pence to 28) and Barclays who rose 11.4 pence to 168.4p.

The construction industry took an upwards hike on increased optimism surrounding a rise in demand for domestic properties.

Taylor Wimpey rose 23.4%, (5.5 pence to 29), Barratt Developments also did well, rising 18 pence to 107, and Redrow also got into the act rising 23.75pence to 176.

Elsewhere on the market, U.K. drug company BTG Plc announced that they looked like achieving their planned target to decrease costs by 10 million pounds for the financial year. One the news, their shares rose 9.7 percent (12 pence to 136.)

To prove the point that despite the recession people will still continue to have babies was strengthened with the announcement that Mothercare Plc, UK’s largest specialist retailer of baby and toddler products had a 5.6 increase in fourth-quarter sales in both their U.K. and international retailing units. Shares in the company rose by 2.1 percent (8.25 pence to 396.)

All in all, the FTSE was a great place to be yesterday, as the market advanced over four percent on the day and the FTSE 100 broke the 4000 barrier for the first time in over six weeks.

The FTSE 250 index rose to 6,816.22while the FTSE 100 finished the session higher at 4,112.95.

Sterling fell slightly against the dollar and the Euro whilst gaining ground slightly against the Japanese Yen and the Swiss Franc:

Pound/US dollar 1.4777

Pound/Euro 1.0979

Pound/Japanese Yen 148.00

Pound/Swiss Franc 1.6767

On Wall Street stocks advanced above their early gains and the Dow Jones Industrial Average broke above the 8,000 level, dropping back to 7978 at the end of trading, with financial stocks leading the charge. The Nasdaq was also on the rise, up 51.03 points to close at 1602.63

US banks continue to generate mini-scandals with the recent news that some of the banks who have been recipients of government aid, among them Citigroup and Goldman Sachs have shown an interest in buying up discounted “toxic debt” from their rivals or colleagues in the industry. This news has caused considerable outcry among financial analysts who claim that these banks, who are now publicly owned, are actually undercutting the hand that feeds them.