Bank Shares to Fall In September..Why?

simpywimpy

A Belgian friend spoke to me of this only yesterday. She says its because the government handouts the banks have received have overinflated the real value of the bank and therefore the shares. These loans have to be paid back and therefore the share price will tumble... dont know enough about it to make my own decision but with shares in Barclays, LLoyds and RBS, I hope its wrong lol

Calchas

sabretoothtigger wrote: »

It'd be about the same as swapping Shell, BP, HSBC just to buy RBS which doesnt seem likely to ever happen

What about if we could persuade Fred back?

Masomnia

simpywimpy wrote: »

A Belgian friend spoke to me of this only yesterday. She says its because the government handouts the banks have received have overinflated the real value of the bank and therefore the shares. These loans have to be paid back and therefore the share price will tumble... dont know enough about it to make my own decision but with shares in Barclays, LLoyds and RBS, I hope its wrong lol

The government's shares will either be sold into the market, which will keep the price down, or be bought back by the bank, which will keep profits down... and thus the price down.

Either way it's going to take time, and lots of it. If you hold the shares long term you'll be fine I'm sure

Old_Slaphead

LULULU1 wrote: »

I have read in 2 or 3 places that Llloydstsb and RBS shares are expected to fall in September.

Is there any special reason for this.

Thanks

In a perfect market, the sum total of known information is factored into the share price. So the authors are either expressing an opinion which will be pure conjecture or they'll have some inside information.

If it was the latter, presumably they'll be taking advantage of it and no purpose would be served by publishing this as it will affect their profit.

I expect therefore that it is the former.

ses6jwg

I have sold out of RBS and Lloyds and I am watching them like a hawk until January.

The truth is nobody knows the future, but RBS and Lloyds were in the sh!te 6 months ago and a whisker away from doing a Northern Rock.

Bad debts are still building up and from what I've read they are reluctant to join the APS scheme. I've read that RBS could climb to 84% government ownership and Lloyds 60% - though they may have another rights issue to prevent this. Either way both scenarios would cause the share price to fall.

However they could very well continue on as they are. Nobody really knows.

But for now, I am out, there are much better opportunities out there now. Maybe in 6-12 months when certainty returns to the financial sector they will become a screaming buy.
Personally I think even if you bought them today and stuck them in an ISA for 5 years you'd be sitting pretty. But a lot of volatility in the short term IMO

LULULU1

So how safe or dodgy are the Lloydstsb finances.

Whats most likley to effect them in the future.

ses6jwg

LULULU1 wrote: »

So how safe or dodgy are the Lloydstsb finances.

Whats most likley to effect them in the future.

Lloyds were good.

HBOS on the other hand were disastrous...

Masomnia

LULULU1 wrote: »

So how safe or dodgy are the Lloydstsb finances.

Whats most likley to effect them in the future.

http://www.lloydsbankinggroup.com/media/pdfs/investors/2009/2009_LBG_Interim_Results.pdf

Enjoy

chopperharris

Rbs , i have shares , quite a few thousand.I havent daytraded , but bought more on dips to bring down my average from 80p to 50p.My exit point is over 80p plus 10 percent for me to cover everything including profit , until then I will sit on them.

I thought 80p was cheap , which it was at the time , but there has been considerable dillution since then.Just like dillution of anything else there is less of one thing with the more you add of another , in this case the share price has been diluted and will never reach the heady highs ever again....so you r hoping for a £5 if the shares themselves have increased 2.5 times the amount since their highs.Realistically they are worth under 30 percent of the top end , with lessening assets this is degraded further.

You also have to add to this the offloading of banking units abroad , technically and importantly theres less money making machine for them.So this is also a reason why they will never reach highs again.

Dividends , an important matter for some investors , have been cancelled for over a year , and not expected until certain targets have been acheived.These targets are getting shot of hmg , which itself has targets , and making a profit in order to give as a dividend.

For these reasons , unless your playing long , theres not much to be made from these 40-50p shares.That is unless your a money maker and you buy in the hundreds of thousands on a dip then sell on a high , which is happening regularly.

Fortunately though rbs is levelling around first phase of hmg profit taking , which is a three month average of 50 odd pence.If RBS were to find some way of absorbing at least a partial of these shares then the up side is less dillution , however it will make priofitabillity even further away but have a positive affect on the sp , so its swings and roundabouts really.Ideally the best option imo would be for rbs to find some way of absorbing totally the first wave.

chopperharris

Just seen on another forum rbs is issuing a medium term note in the us , 35billl usd.

Hmg buyout you think?