RBS Group Shares. Hold? Sell?

Aegis

ad44downey wrote: »

You can't compare Johnny come latelys like Northern Rock, A&L, B&B with their risky business models to the likes of Barclays, Lloyds TSB, etc. They are totally different beasts.

No-one seriously thought Marconi could fall so hard either. The fact of the matter is that if investor sentiment and liquidity of assets falls significantly for any of these beasts, there could be very major share price drops from which they never fully recover.

I'm not saying it's likely, I'm just saying that there's no way to predict where these shares will be in a year or two.

ad44downey

No-one can predict the future. But there's alot more chance that they'll rise in value than fall. And in the meantime you can enjoy the rather generous dividend payments!

napoleon

I read the FT today, first time for everything and all that, and some analyst reckons United Kingdom banks are great value and have little exposure to sub-prime. It's the European and US ones you need to worry about. :T

Browntrout_2

As the original poster said himself this is not the forum for discussing the merits of individual company shares or collective schemes either for that matter.

The risks in holding any single company shares are very high.

If you have a diverse portfolio of shares then it does not matter too much if one company cuts or suspends it's dividend or doubles it's shares in issue so halving your holding overnight.

However if you have lots of cash tied up in holding shares in the company you work for bought from a £250 per month 3 or 5 year sharesave scheme and possibly a monthly £125 (before tax) directshare scheme plus the fact that they hold your pension fund, and possibly it's a case of eggs and baskets!

PS I hold RBS but if they went to £2 I'd not be too surprised likewise £6.

purch

dont forget though, you also get the dividends on the shares

....asuming they make enough 'real' money to pay one

HBOS came within a day of going down

:rotfl: :rotfl: :rotfl:

royeee

With the possible impending rights issue from RBS, what do you reckon your-average-investor is going to do about it and more so if haven't got the dosh (all or part) to buy?

Browntrout_2

Is there such a thing as an average investor, I don't think so?

Anyhow the majority of these will be held by fund managers and other institutions, what the small shareholder does is of no material impact.

IF there is a rights issue the I think the choices are;

1. Do nothing and sell you nil paid rights into the market, effectively reducing your holding. I think this happens automatically if you do not sell earlier, not 100% sure on that though?

2. Add cash and take up your entitlement.

3. A variation of selling nil paid and taking up some.

Anything I've missed?

Bazn

quick question...

there is talk that the rights issue is going to come at a 20% discount to share price... so what is to stop me taking up the new shares and then selling them back on the open market at the full price, giving me an instant profit!?

Banderman

The new shares won't be the same as your existing ones, they'll be called A shares. So you won't be able to do what you suggest!

amcluesent

>what do you reckon your-average-investor is going to do about it<

Most likely panic and sell their holding. Small fry buy at the top and sell at the bottom.