Bank Sector Trading
|
|
 |
Trading Features / Strategies from Simon Denham of Capital Spreads.
So...adieu Northern Rock hello www.nr.gov.uk.
The only real option open to Capt’n Darling became his final decision. Offloading the whole kit and caboodle into the private sector with a big government guarantee was never going to fly. The political fall out from huge wealth being created in the private sector from handing over an ‘operationally’ profitable bank for peanuts would have been an albatross around the neck of the Labour Party for years.
The bank can now be wound slowly down (or aggressively if the government wishes it) whilst making substantial sums for the exchequer at the same time and then sold off after attracting reasonable long term funding commitments from other banks. With the Government now taking up 45% of the entire economy it is nice to know that a small part of it will actually be making a profit! The only black spot is the possible legal ramifications from investors but this should be assuaged by paying the closing price on Friday to each and every share holder as it would then be difficult to argue that you had not been paid a fair market price (as that was the market price at the time).
Financial Spreads >>
"With FinancialSpreads.com you get all the normal
advantages of Spread Betting plus..." >> read
Financial Spreads review.
|
This week is the beginning of the bank reporting season and both Barclays and Lloyds have indicated that they will be raising dividends. This is not a ‘weak’ signal! The banks have other sources of income than ‘sub prime’ mortgages and, whilst growth may be difficult to come by for the next year or so, the other areas are doing very well indeed. Barclays have indicated that, even after writing off all their dodgy debt (they may well get a lot of it back), they will match last years numbers. World growth (not the UK or US) is still very robust and the big players earn a huge slice of total revenue away from these shores.
The reason for the extreme weakness of operators such as Bradford and Bingley is that they have too many of their eggs in one basket (aka Northern Rock) and are heavily reliant on UK growth. Their forays abroad, a surprise anyway for many investors, seem to have brought nothing but pain which will naturally create a tortoise like retreat into the ‘safe haven’(!?) of home just as it looks to be contracting. For those who think that shortage of land is a protection against price falls, the lessons of Japan (an even more ‘green belt’ protective nation than the UK) are educational. It was the travails of the banks over there which precipitated the huge falls in real estate values (at one time property fell some 70% off the peaks) and we can only hope that the same does not happen here.
Varying indicators from the economy shot across our radars last week and whilst we can worry about inflation (next months number should be a doozy) long term pressure looks slightly less obvious. Wage demands are not getting out of control, aside from ‘outside influences’ inflation is not accelerating and we might be about to pass the worst of the commodity based inflation anyway. The real pressure on the UK economy comes from the public sector not from the private, which has been doing reasonably well of late. With so much of our economic interests now tied in with government expenditure the prospect of this being pared back do not bode well. With a very poor trade deficit and public sector deficit there are many arguments in favour of a weak pound and if this happens (in conjunction with a sudden increase in government debt issuance) the consequences may be dire.
The above comments do not constitute investment advice and neither Capital Spreads nor Clean Financial accept any responsibility for any use that may be made of them.
Capital Spreads >>
"With Capital Spreads you get all the normal
advantages of Spread Betting plus..." >> read
Capital Spreads review.
|
Risk Warning: Spread betting carries a high level of risk to your capital. You may lose more than your initial investment. It may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.
Article provided / approved by Capital Spreads which is a trading name of London Capital Group Ltd which is authorised and regulated by the Financial Services Authority (FSA), FSA Register number 182110.
'Bank Sector Trading' edited by SD, updated 18-Feb-08
Related Articles:
Daily Spread Betting Blog, updated 06-Feb-12
In early trading, we are seeing some of the post-payrolls euphoria starting to fade, leaving the FTSE down around 30 points on the day so far. Indices spread betting markets are under some pressure as Greece slides back into centre stage and...read article: Daily Spread Betting Blog.
Spread Betting Prices, updated 06-Feb-12
Spread betting prices - a live spread betting price guide plus which spread betting companies offer live prices, how to use them and...read article: Spread Betting Prices.
Spread Betting Guide, updated 27-Jan-12
Spread Betting Guide: What is spread betting, how to spread bet, spread betting advantages, spread betting examples and...read article: Spread Betting Guide.
Spread Betting Guide to Making a Trade, updated 27-Jan-12
Spread Betting Guide to Making a Trade: A step-by-step guide on how to place a spread bet including a fully worked example and...read article: Spread Betting Guide to Making a Trade.
Stock Market Opening and Closing Times, updated 27-Jan-12
Stock Market Opening and Closing Times: a look at when the leading European, US and Asian stock markets open and close. Plus, where to get stock market index trading analysis, news and...read article: Stock Market Opening and Closing Times.
Spread Betting v Share Trading, updated 27-Jan-12
Some people see spread betting and standard trading as two different sides of the same coin. Whilst the pair do share similarities, it is fair to say that...read article: Spread Betting v Share Trading.
Sectors Spread Betting, updated 27-Jan-12
Sectors spread betting is a convenient way of taking a position on an entire industry by giving investors exposure to a basket of underlying stocks in a particular sector. Sectors are groups of firms that all...read article: Sectors Spread Betting.
First Page << 1 2 3 4 5 6 7 8 9 10 11 12 >> Last Page
Also see:
Trading Features / Strategies Index – an index of all the Trading Features.
|
|
Q) Average Trading Results?
A) Get free spread betting tips, offers, price updates, important news and more!
|
|
