Can The HS2 Project Bring The UK Back on Track?

Background

Great Britain administration has finally announced that it would go-ahead to manufacture High Speed 2 (HS2). Giving Europe’s biggest infrastructure project, permission to go ahead, in spite of various experts and the opposition criticising the administration that it will be billions of pounds over the initial spending plan.

Called the HS2, this new railway project will run between London and Northern English cities. It will cut down travel timings and will also add capacity to the existing network of transport in Britain, which is already very crowded. This will allow the United Kingdom to catch up with countries such as Spain and France in terms of high-speed railway transport. On 11th February 2020, Prime Minister Boris Johnson told the parliamentarians and the lawmakers that he would restore order to the venture if and when the costs and expenses surpass the budget.

This has come after a review was done in the previous year into whether HS2 should be given the green light or not, after the estimated expenses of the project increased to £ 106 billion or US $137 billion, around double of what was estimated about five years ago when this project was first brought at the forefront by the David Cameron administration.

All about the UK High Speed 2 Project

After his HS2 announcement, the Prime Minister Boris Johnson also announced and made commitments on both the London to Birmingham rail line as well as an additional phase from Birmingham to Leeds and Manchester, commenting that the project would be integrated with the Northern Powerhouse Rail, a more extensive plan including a fast and better connectivity between the cities of  Manchester and Leeds.

Johnson also asserted that his administration was making way for a future, where fast trains will ply between the major urban cities, where electric buses carry people in an emission-free environment around the different towns alike, where self-driving vehicles will move along streets in a congestion-free environment, which otherwise would have caused a lot of pollution, and where new generation of cyclists pedal securely and with content, to school, colleges and jobs in tree-dappled daylight on their own network of completely separate cycleways. This was in line with the government’s £5 billion commitment over building new cycle and bus infrastructure over the next five years.

Business groups and unions have welcomed the HS2 decision, saying that it is good for the businesses, investment and growth in many parts. However, there are voices against the project as well; people are challenging its claimed environmental benefits. There are some, who are even asking if the tickets of the new network will be affordable, some are stating it an going to be an annoying burden for the government. 

UK Stocks that will potentially be affected by the project

As this project is passed, various construction and material industry companies will be given contracts and tenders in the United Kingdom to work on this project. This could potentially impact the share prices of various stocks. Let us briefly have a look at the price performance of such stocks at the London Stock Exchange market.

Balfour Beatty Plc (LON: BBY) Stock Price Performance

As on 13th February 2020, at 08:22 A.M (Greenwich Mean Time), by the time of writing this report, the Balfour Beatty Plc Stock was trading at a price of GBX 278.60 per stock on the London Stock Exchange market, an increase in the value of 0.58 per cent or GBX 1.60 per stock, as opposed to the price of the stock on the previous trading day, which had been reported to be at GBX 277.00 per stock. The market capitalisation (M-Cap) of the stock stood at a value of GBP 2.02 billion, with respect to the current market price of the stock of the company, at the time of writing this report.

The beta of the Balfour Beatty Plc’s stock has been reported to be at 0.51, giving an idea that the movement in the stock price, is less fickle, as against the movement of the comparative benchmark index.

Galliford Try Holdings Plc (LON: GFRD) Stock Price Performance

As on 13th February 2020, at 08:25 A.M (Greenwich Mean Time), by the time of writing this report, the Galliford Try Holdings Plc Stock was trading at a price of GBX 173.61 per stock on the London Stock Exchange market, an increase in the value of 0.61 per cent or GBX 1.05 per stock, as opposed to the price of the stock on the previous trading day, which had been reported to be at GBX 172.56 per stock. The market capitalisation (M-Cap) of the stock stood at a value of GBP 191.63 million, with respect to the current market price of the stock of the company, at the time of writing this report.

The beta of the Galliford Try Holdings Plc’s stock has been reported to be at 0.44, giving an idea that the movement in the stock price, is less fickle, as against the movement of the comparative benchmark index.

Ibstock Plc (LON: IBST) Stock Price Performance

As on 13th February 2020, at 08:26 A.M (Greenwich Mean Time), by the time of writing this report, the Ibstock Plc Stock was trading at a price of GBX 311.80 per stock on the London Stock Exchange market, an increase in the value of 0.58 per cent or GBX 1.80 per stock, as opposed to the price of the stock on the previous trading day, which had been reported to be at GBX 310.00 per stock. The market capitalisation (M-Cap) of the stock stood at a value of GBP 1.268 billion, with respect to the current market price of the stock of the company, at the time of writing this report.

The beta of the Ibstock Plc’s stock has been reported to be at 1.14, giving an idea that the movement in the stock price, is more volatile, as against the movement of the comparative benchmark index.