Market report: British Land loses its footing as City frets about political events

British Land sold its 50% stake in the Cheesegrater for almost £600 million
Jamie Nimmo21 August 2017

It might have sold the Cheesegrater earlier this year for a huge £1.15 billion, but investors decided today that selling British Land was good for their own portfolios.

Shares in the property giant — which offloaded the City landmark in March to CC Land — the investment vehicle of Chinese property magnate China Cheung Chung-kiu, were down 9.68p, or 1.6%, to 603.5p after HSBC downgraded from Buy to Hold.

The broker expects a “sound but low return” this year, but expressed concerns about the UK economy and political events to hurt prevent any share price rally.

“The large UK-proxy property companies are particularly prone to UK-centric economic and political events,” analyst Stephen Bramley-Jackson said.

HSBC’s number-cruncher said this leaves little opportunity for a share price surge, “underscored by a declining UK GDP growth trajectory”, he added.

British Land was among the biggest blue-chip fallers as the FTSE 100 fell a further 17.98 points to 7306.00 today.

Economic and corporate news may have been thin on the ground today, but investors were still mulling over issues from last week, such as friction between the US and North Korea.

“Though the tensions between the US and North Korea have faded into the background due to the domestic crisis engulfing Donald Trump’s presidency, the start of military exercises between America and South Korea could spark a return to the kind of market-dragging nuclear rhetoric seen a few weeks ago,” Spreadex analyst Connor Campbell said.

Mining shares started the week on the front foot as expectations of high demand for steel in China propelled London zinc to its highest in a decade. Rio Tinto strengthened 32p, or 0.9%, to 3461.5p, BHP Billiton was up 6p at 1357p, and Anglo American rose 3.5p to 1283.5p.

However, gains were outweighed by falls from banking, with Royal Bank of Scotland down 3.1p to 254.4p.

A bullish report from Barclays wasn’t enough to drive the UK’s big two oil firms higher.

The bank rated BP and Royal Dutch Shell as Overweight, and said the former is the most undervalued among the European majors.

But a weaker oil price — Brent dipped 53 cents to $52.44 a barrel — held both back: BP edged down 0.27p to 439.65p and Shell drifted 10.2p lower to 2133.5p.

AIM-listed video games developer Frontier Developments surged 140p, or 19%, to 875p after announcing plans to create Jurassic World Evolution, based on the film franchise.

It will be released next summer, when the new film Jurassic World: Fallen Kingdom, starring Chris Pratt, hits cinemas.