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FTSE 100 climbs nearly 1% with Taylor Wimpey leading the way

Discussion in 'Market News' started by Lily, May 17, 2016.

  1. Lily

    Lily Forum Member

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    Housebuilder pleases investors with news of new special dividend

    Leading shares are heading higher again, helped by the continuing strength in the oil price and positive moves in the US and Asian markets, and shrugging off weaker than expected UK inflation figures.

    Taylor Wimpey is topping the risers, up 11p at 195.9p after the housebuilder announced a special dividend amid a strong property market. The move means it plans to pay investors £1.3bn by the end of 2018, higher than the expected figure of around £1.1bn. Analysts at Canaccord Genuity said:

    Ahead of its capital markets day today, the group has announced a very positive update to its dividend policy as well as stretching its medium-term financial objectives.

    It has increased its ordinary dividend to around 5% of net assets to be paid through the cycle from 2017 and announced a special dividend of £300m to be paid in July 2017 (it had already announced £300m to be paid in July 2016). The group has also increased its medium-term financial targets, covering the period 2016 to 2018, given the strength of the market and the group’s performance. It now expects an average return on net operating assets of 30%, an average operating margin of around 22%.

    The UK new build housing market remains very positive across most of our geographies, with a healthy and controlled lending environment providing good accessibility to mortgages at competitive rates. Consumer demand and confidence remain high. In central London, the market continues to be stable.

    A positive finish both the US and Asia, plus the fact that oil prices continue to march higher, have combined to ensure London’s FTSE-100 kicks off Tuesday’s session by extending yesterday’s late gains. With metals prices finding favour too, it’s no real surprise that natural resources stocks have been left scattered across the upper reaches of the board.

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