Sharewatch: Kier’s star turn

Kier was in high spirits last week as shares in the contractor, developer and housebuilder rose to an all-time high of more than £12.

Shares in the company have been rising since the start of the year, reflecting a shift in the same direction as its earnings. During the week, Kier’s shares rose almost 14% to 1230p, making it the star performer.

The company has earned respect in the market, not least because its housing business has been a strong performer despite the slowdown in the market and poor performances from some of its rivals.

This year it reported record results for the 13th consecutive year.

Kier was not the only company in the sector to have a good week. Shares in all but four companies in the construction sector rose as the industry enjoyed a wave of optimism that has been lacking in the recent months.

Analysts put this down to diminishing fears that the government’s spending plans were going to be reined in, which would severely reduce the industry’s workload.

Other factors at play were the takeover approaches, which generally boost sector shares, received by Mowlem and Pilkington. Shares in contractor Mowlem rose 5.5% to 182.5p, and glass-maker Pilkington was up almost 20% to 151.5p when it revealed itself as a takeover target.

All the volume housebuilders enjoyed a positive week, with the most notable performances from Berkeley (+12.7%), Persimmon (+9.7%), Wimpey (+9.2%) and Barratt (+9.1%).

Contractor and housebuilder Galliford Try had another good week, up 8% to 83p. And building materials company Wolseley, the biggest in the construction index, rose 5% to 1184p.

One of the few exceptions to the rule last week was ROK Property, which fell 1.4% to 438p.

Performances within the support services sector were also solid, with a rise of about 5% at Amec, which last week merged its UK design and construction businesses. White Young Green and Waterman also benefited from increases of about 5%.

Overall, the Construction and Building Materials Index had one of its strongest weeks in 2005, up 7% to 3856. It outperformed the All-Share, which rose 4% to 2721.