“Blue-chips were lower in early trading following mixed sessions in the US and Asia with utilities, banks and commercial property stocks taking the FTSE100 into negative territory,” says AJ Bell Investment Director Russ Mould.
“Property services group Countrywide was the FTSE250’s biggest faller in early trading after warning that full-year earnings will be at the lower end of forecasts. This is based on the reduced level of transactions it has seen in the second half of this year while Chancellor Philip Hammond’s plans to ban upfront letting fees now hangs like the Sword of Damocles over the group’s future earnings. Countrywide’s shares were down by more than 14.1% in early trading.
“Belvoir Lettings, the UK’s largest property franchise, was a double-digit faller after anticipating that the impact of the Government’s ban on upfront letting fees on gross profits would be less than 8%. No timetable has been given by the Government and there will be a consultation process prior to implementation but Belvoir’s figures are based on the group’s experience following a similar decision in Scotland in 2012. Belvoir’s shares were down by over 10.8%.
“Mining heavyweight Rio Tinto has set out a productivity plan to generate $5 billion of additional free cash flow over the next five years. Rio Tinto is also committed to maintaining an appropriate balance between investment in the business and cash returns to shareholders which, over the longer term, it expects to be in a range of 40- 60% of underlying earnings in aggregate.”