- Barratt to reopen 50% of its construction sites in May
- The developer warns of a low number of completed houses this year due to the lockdown measures
- Stock price hits plunged 5% to hit a 3-week low near the £4.5 mark
Shares of Barratt Developments (LON:BDEV) fell 5% yesterday as the investors’ concerns about a second wave hit and global recession are growing.
Fundamental analysis: FTSE Index selloff, Barratt struggles
The UK investors are growing increasingly concerned that a fast recovery will not happen as many countries around the world report an increase in the infection cases after the lockdown measures were loosened.
The FTSE Index fell 2.5% with only four of its constituents closed in green. One of the worst-performing stocks of the day was Barratt, who lost 5% amid concerns that a global recession and slow recovery are likely to continue creating damage to the property market.
“A warning from the top of the US central bank that there’s more pain to come isn’t going down well across markets,” said London Capital Group analyst Jasper Lawler.
“Fed Chair Jerome Powell warned yesterday that more stimulus will likely be needed in the US to fend off the economic damage done by the virus and policies aimed at containing it.”
Still, the UK-based housebuilding giant Barratt said it will listen to the Government’s guidance and commence construction works this month. Around 50% of Barratt’s construction sites will host workers this month in the gradual return to normal operations.
Invezz reported that UK PM Johnson urged construction workers to return to work on Monday. Barratt said that its sales centers and show home units will remain closed.
“With the phased reopening of our sites, a significant proportion of our workforce will be able to return to work during May,” the developer said.
“We have created a detailed set of working practices and protocols for employees and sub-contractors to ensure that we can reopen our construction sites safely, in a phased and measured way, which minimises risk,” CEO David Thomas added.
Barratt warned that it expects a low number of completed houses this year due to the COVID-19 outbreak and lockdown measures.
Technical analysis: Stock price takes a dive
Barratt stock price fell 5% yesterday to hit the new 3-week low as sellers cemented their gains below the £5.00 mark. Shares of the developer crashed 60% since the COVID-19 global outbreak started in February to trade at the lowest levels since 2013.
The bears will be now targeting a move to £4.30, which marks an important horizontal support/resistance for the stock price. A break of this level would pave the way for a south trip to the February lows near the £3.5 handle.
Shares of Barratt Developments were one of the worst performers on Thursday as investors’ fears over a second virus hit continue to grow. The developer said it aims to restart construction works at 50% of its sites this month.