UBS flags rising taxes and less upside for U.K. builders

Analyst Greg Kuglitsch said the sector now trades on 1.6 times tangible net asset value, below the peak of 2 but above the long-term average of 1.2. While the market remains undersupplied, higher corporate taxes and an expected 3% tax rate to finance re-cladding is a concern, he said.

The FTSE 100
UKX,
-0.12%
was lower by 0.3% in afternoon trade, after the Bank of England gave no indication that it was anywhere near removing stimulus. In a unanimous decision to keep rates at 0.1% and its bond-buying program unchanged, the central bank said there would be no tightening “until there is clear evidence that significant progress is being made in eliminating spare capacity and achieving the 2% inflation target sustainably.”

The pound
GBPUSD,
-0.39%
drifted lower after the decision.

It also was the first opportunity for traders in the U.K. to react to the Federal Reserve decision, in which the central bank said it wouldn’t raise interest rates through 2023. The yield on the 10-year Treasury
TMUBMUSD10Y,
1.745%
spiked higher on Thursday, as traders assessed the implications of the decision as well as Chair Jerome Powell’s relaxed attitude toward the bond market selloff.

Ocado Group
OCDO,
-4.20%
shares fell 5%. The food delivery service reported 40% revenue growth in its U.K. venture with retailer Marks & Spencer
MKS,
-0.66%
for the quarter ending Feb. 28, but said sales and Ebitda (earnings before interest, taxes, depreciation and amortization) growth will slow due to tougher comparisons.

Fevertree Drinks
FEVR,
-10.29%
shares slumped 10%, as the fast-growing tonic-water maker issued margin guidance that was sharply below expectations.