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TODAY'S OTHER NEWS

Agents' Mutual float to begin against backdrop of stock market jitters

Most listed agencies and portals suffered share price falls yesterday, creating a challenging landscape for Agents’ Mutual which launches on the London stock exchange on Friday.

Yesterday Countrywide dropped more than seven per cent, taking its share price well below the point when former chief executive Alison Platt left the organisation at the end of last month.

LSL Property Services dropped over three per cent; Property Franchise Group, Winkworth and Foxtons suffered less but still fell between 0.4 and 2.5 per cent yesterday.

Savills, felt by some analysts to be less vulnerable to stock market volatility because of its international activity across residential and commercial property, nonetheless fell around 2.8 per cent. 

Amongst traditional agents only Hunters and Belvoir bucked the trend, up one per cent or less, while Purplebricks - after several days of substantial falls following the controversial analysis of its sales record by Jefferies consultancy - actually rose around three per cent on the day.

But property portals ZPG and Rightmove both dropped three per cent mark as stocks in almost all sectors displayed volatile activity.

Yesterday's falls followed sharper downward movement by many stocks on Monday.

Agents’ Mutual, the parent company of fledgling portal OnTheMarket, launches on Friday with its share price set to begin at 165p when trading opens.  

Stock market launches such as those planned by Agents’ Mutual are sometimes deferred in times of high volatility, but the cost involved in setting up such a launch means most firms in that position have to grin and bear it, even if trading conditions are far from ideal.

However analysts suggest that in a downward stock market such as today’s, investors may try to take down the price of an IPO from the outset; this could lead to friction with Agents’ Mutual initial shareholders and worry that their asset will be undervalued. 

The price may be under pressure from the start anyway as analysts were critical of Agents’ Mutual raising only £30m for its IPIO rather than its targeted £50m. George Salmon, an equity analyst at Hargreaves Lansdown, said two weeks ago that AM may be Britain’s third biggest portal but that meant it was merely “first among the also-rans.”

Analysts suggest that the recent stock market turmoil across most sectors and in the US and Asia as well as in the UK and Europe, has been caused by American data suggesting stronger-than-expected wage growth and a risk that interest rates might be increased in a bid to counteract inflationary pressures.

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