Fund managers have reacted to Philip Hammond’s Budget by revealing the shares they think can profit from the measures announced by the chancellor.
Shares of UK housebuilders such as Persimmon were among the steepest fallers on the FTSE 100 in the immediate aftermath of the 2017 Autumn Budget.
But the sector is a buy, according to Stephen Bailey, who runs the £286m Liontrust Macro Equity Income fund.
He said share price weakness seen in the house builders in the hours after the Budget was the result of the market fearing the consequences of the announced review into “landbanking”.
Land banking involves buying large blocks of undeveloped land with a view to selling it at a profit when it has been approved for development.
The chancellor criticised the practice and said the government would be carrying out a review into it.
But Mr Bailey said he thinks the measures announced to boost access to housing - such as scrapping stamp duty for first time buyers on property's below £300,000, and plans to build 300,000 new properties a year - will deliver benefits that outweigh the difficulties caused by the review.
Anthony Lynch, who jointly runs the £271m JP Morgan UK Core Equity fund, said he believes the best way to profit is not through the house builders, but through companies such as brickmakers Ibstock and Forterra, and materials supplier Polypipe.
He said the measures announced by the chancellor contained both “carrot” and stick” for housebuilders, so the materials companies offer better prospects.
But Richard Buxton, who runs the £2.2bn Old Mutual UK Alpha fund, said the budget changed very little for UK equity investors, with the chancellor “keeping his powder dry” to take more radical action in future budgets as the Brexit date approaches.
David.Thorpe@ft.com
