Northern Rock - Shares [Merged Threads]

[Deleted User]

The jump would be more due to recovery/takeover speculation.

The share holders wont give a flying monkey that the savings are backed. I doubt that it would get printed in the press for those worried pensioners either.

purch

citibank have merely offered to lend NR 10 billion

To clarify it is CITIGROUP Inc. the holding company not Citibank the bank( necessarily ) who are involved here.

FelOn_2

Jake'sGran wrote: »

According to The SundayTimes Business section yesterday it will be Citibank that will probably get Northern Rock. It was on the front page and you can read it on line today.

These are the scumbags (same group) who put a valuation of 6p on NRK :rolleyes:

Reestit_Mutton

Yant1 wrote: »

The jump would be more due to recovery/takeover speculation.

The share holders wont give a flying monkey that the savings are backed. I doubt that it would get printed in the press for those worried pensioners either.

You're wrong there, Yant1.

With a cast-iron guarantee, savers who are risk-averse in the current climate may see NRK as a safe-haven for their cash. If NRK can use this guarantee to increase their deposits then they will lessen their refinancing problems and their dependence on BoE money. This, in turn, gives NRK a certain level of protection from being forced to sell itself at fire-sale prices which, in turn, will have a positive effect on the share price - since the news was released, NRK 's share price has shot up by some 10% over and above the initial gain on opening this morning.

There is also one other possible jewel in the announcement that hasn't been mentioned yet (from their news release):

"These arrangements will cover all retail deposits including future interest payments, movements of funds between accounts and term deposits >>>>> for the duration of their term. <<<<<<"

Now...does this actually mean that term deposits will be guaranteed for their full term regardless? I don't really know as there is an additional footnote to the announcement which appears to contradict this:

"the arrangements to protect depositors of Northern Rock plc will remain in place during the current instability in the financial markets."

I guess we'll need to investigate the details of the deal further to answer this question. However, if my initial interpretation is correct this would mean that anyone wishing to lock away their money for a while would be mad not to deposit their money with Northern Rock in the current climate (especially if they are feeling a little risk averse ATM). An increase in longer term deposits is exactly what NRK really needs ATM.

As for whether it will get printed in the press...NRK's management would be negligent beyond belief if they didn't seek to advertise their newly-extended deposit guarantee as far and wide as possible - as it is, it's already trumpeted on their website. You can bet your bottom dollar that there will be full-page adverts in the press ASAP - it's already being reported across a wide range of newspaper websites and it will doubtless be on all the news programs this evening.

My only reservation about this is how the BoE can successfully argue to the EU that this doesn't amount to illegally providing an unfair commercial advantage to NRK without being forced to extend the same protection to anyone else who wants it, under the same terms. I suspect that they have linked it to the LOLR facility with both its stigma and penal rate and anyone else who is prepared to publicly humiliate themselves in the same way by announcing to the world that they have asked for LOLR support will also be given the same guarantee for a fee. In this way it would be seen as too big a price to pay for anyone who isn't already in financial trouble.

HtH
Reestit Mutton

[Deleted User]

I think your wrong, because the 35K guarentee was released a while back, the latest rises are correlated more due to the news story citigroup guarenteeing a 10bil loan to ensure NRK can still operate whether its took over or not.

Either way NRKs mortgages are now not competitive and wont make much money. Therefore this virtual computer game of a bank wont be able to carry on magic imaginary funding structure that led to its profits that punched above its weight.

RIP NRK

Reestit_Mutton

Yant1 wrote: »

I think your wrong, because the 35K guarentee was released a while back

Sorry...I'm not sure what you mean by "released a while back".

ALL banks now have a £35K guarantee and NRK is not exempted from that.

However, NRK had an unlimited guarantee for all existing and new deposits until the government changed their mind on 19 September and effectively limited it to only those accounts that existed prior to 19 September and internal account transfers.

Today's announcement removes that limit once more, making NRK a more attractive place to save during the current uncertain climate.

The latest rises are correlated more due to the news story citigroup guarenteeing a 10bil loan to ensure NRK can still operate whether its took over or not.

That rumour has already been factored into the share price - of course, there will be more growth to come if the rumour is subsequently publicly confirmed by a press release announcing the details of the deal.

Reestit Mutton

ManFromBarming

I think you are very brave the Northern Rock brand now looks damaged beyond repair and likely will end up being a fire sale of its assets at a knock down price with share holders being left with little or nothing, but for your sake I very much hope this turns out not the case.

If I had spare cash to invest in shares, I would be looking to invest in Oil & miners, Shell seems very cheap & good value at the moment and the miners such as BHP Biliton, Anglo American, Rio Tinto. although not as cheap as they where a few months back. unrelated Aviva insurance seems a good value too.

[Deleted User]

Yep ur right it would be very brave going long on NRK.

Out of your list id be betting my money on BHP. But I have my own list

Rhino666

Northern Rock powering ahead today - £2.62 a while ago.

If you bought this stock recently it may be worth covering your position with a stop loss limit at your broker to protect the rises of the last few days against any sudden crash.......it could happen !!

Rhino666

Al_Mac wrote: »

Call me thick, thanks, but if they're such a waste of time, why are some of the big boys dealing in whole percentages of stock on a daily basis.

Citibank/ABN/Barclays are all at it. If they wanted to pick at the bones surely stopping any turnover is the surest way to send the price down.

' Yer thick '

No but seriously, the problem with volatile stocks is that the big boys, as you call them, can react very quickly to changes, know more about the market (through advisers), are usually spending other peoples money and buy and sell at will.

People like us know very little, cannot make money without relatively large price changes and can lose a large chunk of our hard earned at the drop of a hat. Sensible private investors generally steer clear of volatile stocks :-)

Northern rock has had a huge amount of bad publicity, seeing the shares drop as low as £1.11, I think it was (£12.50 within last 12 months). Whilst they have been allowed to survive there was only one way for the shares to go once the bad news stopped. Catching a falling knife as people call it is very nearly impossible and who was to say that it was catchable.