It has been a few weeks since we last looked at the UK banks. Last time we saw them, they were on their knees begging Gordon Brown for help and the Labour MP's in parliament were salivating at nationalising the core of UK capitalism.
Yet the recent stock market recovery has been a wild one for bank shares since March:
Barclays - 58p to 300p
RBS - 10p to 50p
LLoyds - 38p to 121p
HSBC - 350p to 517p
Long-term investors have still seen massive value loss - but have recovered quite a lot in the case of Barclays and HSBC in particular.
The UK Government is now in the money on its Lloyds investment and only 30% away from being in the money on its RBS investment. All this on the back of some spring optimism and a duff set of stress testing in the UK. Not long until Brown will start boasting about this is my reckoning.
On a personal note my investments in RBS and then Lloyds have me smiling a little more as I near break-even from last years 40% loss on my portfolio. But I have been selling down my shares, this bank rally seems to be built on sand. A case of making hay whilst the sun shines...
14 comments:
Going to take a bit more for me to make money on my RBS and Barclays investmenrs sadly......
It wouldn't surprise if the curse of Brown struck as soon as he aired his arrogance / optimism.
Those shares are still a long way from stable, given the UK's continuing economic demise.
But who is buying the shares and where is the money coming from? Is the market being pumped up from somewhere because an election is pending?
RE - I sold my 80% losses in bank shares and bought in again. A near 4 fold increase has brought me back to where i started. It does not pay to be a long-term holder of shares in bear markets.
LFAT - Quite. QWith the big losses coming downstream, I can't see bank shares being any less volatile in the near future. Now the threat of going bust has receeded thoguh, they won't re touch the lows they have seen.
Demetrius - There is a huge amount of cash on the sidelines of the market as people pulled out last year. Also hedge funds etc who were short are now long in financial stocks. As equities are re-rated there could be further sharp moves upwards. it is importnant to remember the market is still over 30% down year on year.
You guys have been scaring me about these stress tests so I whacked a short on Barclays yesterday morning to cover my Man Group stock and it worked!
Yippee!
"Not long until Brown will start boasting about this is my reckoning."
Hmmm. Hence the reason I think its too early to say its all over for Labour electorally.
With the amt of monetary pumping thats gone on there will be all sorts of signs to suggest "green shoots" over the next few months. I dont think it will be long lasting but it may be enough to give labour another shot at governing. If Labour are lucky the double digit inflation and consequent downturn will come after the election.
Hi Cityunslicker - I posted as Terry on Alphaville today (6/5/09). Was asking about info on changing careers into the ACA and taking the foundation course. You kindly mentioned you could be of assistance. My email address is zlte017@googlemail.com. Your help in this matter would be greatly appreciated.
Thanks
Sterling getting stronger too.
House prices seem to be on the turn as well.
Wa's 'appenin' ?
Since the Govt is now a major shareholder in most banks; could I suggest they are playing the market?
Unemployment.
Credit card debt.
Domestic housing crash.
Commercial property crash.
Don't break out the bunting yet.
Ride the rally for what you can get, recover some losses, but get out before the lot crumbles. Who knows where the bottom will be?
After seeing today's closing prices I'm tempted to lump you lot in with the perma-bears like I do Sackerson.
First thing tomorrow that short gets closed (if I manage to wake up in time or my stop-loss doesn't do it for me)
Japan was on holiday this week and the market opened up 4.6% today, the first day of trading of the week.
If I'd followed my gut instincts and gone into Japanese banks last friday it would have been a peachy day.
I got burnt last year on finance stocks, and the uncertainty over the stress tests added to this. Once they've been bid up, then there's just no way in.
LBG tanking today and barclays flying. Short government owned banks and long on private ones....
Should have left it open by the looks of things after all, it would have done it's job to an extent.
That's what you get for trying to be clever I guess.
Post a Comment