AUS
NZ
UK
CA
USA
IND
In an unprecedented set of events, during the previous month, Sajid Javid left his job as the Chancellor of the exchequer leaving a significant challenge for his successor, Rishi Sunak, with just around 20 daysâ time to get ready and come up with the budget of the United Kingdom for the year 2020, expected to be announced on 11th March 2020. Mr Boris Johnson, the prime minister of the United Kingdom, previously, in his Brexit speech, had mentioned that this would be the dawn of a new era in terms of the spending by the British administration. The new chancellor, who, after assuming his charge, became only the second youngest person to hold the position in more than a century, has constantly been working with not just the British administration, but also with their European Counterparts, to present a budget, that can not only stimulate economic growth in the short term of the transition period but can also provide a base for the long term economic development of the country. Another challenge currently on his hand is to revive the reeling economy from any potential impacts of the Covid-19 epidemic, that has become the centre of the global economic slowdown.
Budget 2020: Key Issues under the lens
The following are the key issues that are expected to be dealt with by UK Chancellor:
The Spending â One of the biggest issues to be taken care of by Mr Sunak is the strategies of the chief Advisor to Mr Boris Johnson, Mr Dominic Cummings. Cummings has been interested in stimulating the economy in such a way that the income levels for individuals, and at the same time revenue levels for the corporates could rise, up to an extent where the countryâs population could start contributing to the healthcare of the country and make the insurance and healthcare sectors of the country independent. This is a policy action that Mr. Boris Johnson has pointed out to achiev in his Post Brexit Speech, stating it to be executed at the earliest.
Tax Structure â There have also been strong voices from the parliament, especially from the Prime Ministerâs side, who wants the rich of the country to be taxed at an even higher rate, which they believe, would increase the tax revenue for the country. It will be a responsibility of the new Chancellor of the Exchequer to examine the short term, as well as the long term impact of such a policy action, and it is believed that Mr. Rishi Sunak would at least touch base on this point during the Budget speech on 11th March 2020.
Housing and Real Estate â Real estate has been one of the areas of concern for the UK, as general price rises in the recent past have not just impacted the housing market, but it also had a significant impact on other industries, especially the retail sector. Rising real estate prices have driven the expanding cost base of these retail companies, many of whom had to shut down, during the last few months of the previous year as well as in the first month of this year. During this period, two industry bodies of landlords, that are responsible for maintaining the regulations in the real estate industry, as well as to ensure fair practices, The Residential Landlords Association (RLA) and the National Landlords Association (NLA) issued a press statement demanding a tax reform in the private rented sector (PRS) from Mr Rishi Sunak in the Budget for FY 2020. As per the two bodies, any tax changes that will be implemented will increase the burden on the real estate sector, such as the implementation of a stamp duty charge on second homes as well as any changes to the law that granted relief on interest for the mortgage. It will be putting the landlords off the rented space in the market, which will further drive a huge reduction in supply. As a result, the housing and real estate sector is expecting to see certain positive changes, that could lead to an increase in the aggregate supply of units for both residential and commercial purposes, as well as some policy action, that could also lead to a reduction in rent pricing.
A huge revolution might be coming in the real estate sector in the United Kingdom, and on the back of that, we will also be looking at a higher volume of capital infusion into the Real Estate Investment Trusts, both as an institutional activity, as well as on the stock exchanges. Following is a brief review of the stock performances of some of the large-cap real estate investment trust stocks, trading on the London Stock Exchange.
SGRO Stock Price Performance
As on 6th March 2020, at 03:20 P.M (Greenwich Mean Time), by the time of writing this report, the Segro Plc share was trading at a price of GBX 843.40 on the London Stock Exchange market, a decline in the value of 3.92 per cent or GBX 34.4, in comparison with the price of the share on the previous trading day, which had been reported to be at GBX 877.80.
As of the time of reporting, the market capitalisation of Segro Plc has been reported to be at a value of GBP 9.626 billion, with respect to the current trading price of the companyâs share.
The beta of the share of the company has been calculated at 0.86 by the time of writing this report. This points to the fact that the share price movement of the companyâs stock, is less fickle, in comparison with the movement in the price of the comparative benchmark index.
LAND Stock Price Performance
As on 6th March 2020, at 03:25 P.M (Greenwich Mean Time), by the time of writing this report, the Land Securities Group Plc share was trading at a price of GBX 784.20 on the London Stock Exchange market, a decline in the value of 3.59 per cent or GBX 29.20, in comparison with the price of the share on the previous trading day, which had been reported to be at GBX 813.40.
As of the time of reporting, the market capitalisation of Land Securities Group Plc has been reported to be at a value of GBP 6.031 billion, with respect to the current trading price of the companyâs share.
The beta of the share of the company has been calculated at 1.00 by the time of writing this report. This points to the fact that the share price movement of the companyâs stock is similar to the movement in the price of the comparative benchmark index.
DLN Stock Price Performance
As on 6th March 2020, at 03:30 P.M (Greenwich Mean Time), by the time of writing this report, the Derwent London Plc share was trading at a price of GBX 4014.00 on the London Stock Exchange market, a decline in the value of 3.28 per cent or GBX 136.00, in comparison with the price of the share on the previous trading day, which had been reported to be at GBX 4150.00.
As of the time of reporting, the market capitalisation of Derwent London Plc has been reported to be at a value of GBP 4.638 billion, with respect to the current trading price of the companyâs share.
The beta of the share of the company has been stated at 0.57 by the time of writing this report. This points to the fact that the share price movement of the companyâs stock, is less fickle, in comparison with the movement in the price of the comparative benchmark index.
BLND Stock Price Performance
As on 6th March 2020, at 03:35 P.M (Greenwich Mean Time), by the time of writing this report, the British Land Company Plc share was trading at a price of GBX 458.40 on the London Stock Exchange market, a decline in the value of 5.70 per cent or GBX 27.70, in comparison with the price of the share on the previous trading day, which had been reported to be at GBX 486.10.
As of the time of reporting, the market capitalisation of British Land Company Plc has been reported to be at a value of GBP 4.504 billion, with respect to the current trading price of the companyâs share.
The beta of the share of the company has been stated at 0.96 by the time of writing this report. This points to the fact that the share price movement of the companyâs stock, is almost similar to the movement in the price of the comparative benchmark index.
UTG Stock Price Performance
As on 6th March 2020, at 03:40 P.M (Greenwich Mean Time), by the time of writing this report, the Unite Group Plc share was trading at a price of GBX 1107.00 on the London Stock Exchange market, a decline in the value of 3.91 per cent or GBX 45.00, in comparison with the price of the share on the previous trading day, which had been reported to be at GBX 1152.00.
As of the time of reporting, the market capitalisation of Unite Group Plc has been reported to be at a value of GBP 4.188 billion, with respect to the current trading price of the companyâs share.
The beta of the share of the company has been stated at 0.80 by the time of writing this report. This points to the fact that the share price movement of the companyâs stock, is less fickle, in comparison with the movement in the price of the comparative benchmark index.
Comparative Share Price chart of SGRO, LAND, DLN, BLND and UTG
(Source: Thomson Reuters) Daily Chart as on 06-March-20, before the closing of the LSE Market
