Wednesday, July 23, 2008

Strong rise in UK banking shares

Strong rise in UK banking shares

Shares in some of the UK's leading banks have risen strongly on the back of takeover rumours and hopes of a recovery in the financial sector. HBOS, the UK's biggest mortgage lender, jumped 16.9% on talk that it could be a takeover target for Spanish bank BBVA.

Posted by edwardnh @ 09:36 PM (1164 views)
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7 thoughts on “Strong rise in UK banking shares

  • tyrellcorporation says:

    Takeovers are a great way of hiding any brown smelly stuff lurking off balance sheet. The sector is still in full de-leveraging mode though and profits will take a hammering over the next 2 years at least. A few more nasty results will snuff out this rally IMO.

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  • yeah – but SPANISH banks ?????

    I smell a rat. The market has tanked in Spain and you would expect mortgage banks to be breathing very quietly, not going on take-over shopping sprees, even if they do want to muddy their accounts.

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  • Bear market rally for sure IMHO.

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  • rotten tomato says:

    Inbreda you are indeed right. Basically the Spanish bank is using ECB free money to buy (read bail out) HBOS. Trichet knows all this of course, so all his posturing about inflation is poppycock. Ultimately though, this will just mean more debt to go around for the banks, and the worsening of their sinancial positions. It’s great watching this show unfold, where’s my popcorn?

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  • I thought the rumour about a possible HBOS takeover to be very suspicious, particularly with regard to timing. Underwriters have bought the unwanted rights issue shares for £2.75 each to the tune of billions of pounds. They are now faced with having to dump these on the market at a possible loss. Up pops a rumour about a buyout and the shares shoot up to £3.20. The underwriters then feed their shares into the market in a controlled manner, securing a nice fat profit. Share dealing volumes charts for HBOS show that somebody is now shifting them around in vast numbers.

    As usual, small investors and private shareholders are screwed while the big boys who are ‘in the know’ and have the power to influence the market scoop up the winnings.

    Am I starting to sound like S2r1 ?

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  • p. doff – you’re specifying mechanisms and making sense. Instead of developing a NWO the bankers are simply staying ahead of the curve because they have the inside track, inside knowledge, the ability to manipulate and political influence.

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  • No doubt the HBOS rights issue underwriters got out of their hedging short positions before this share price rise.

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