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Lloyds Banking, Barclays: off colour on rights issue PDF Print E-mail
Written by Gary Howes   
Tuesday, 13 October 2009 09:08
Banks were off colour on the FTSE 100 again. Rights issue rumours continue to dog Lloyds Banking, while Barclays joined its government-owned rival in the red.


The FTSE 100 (INDEXFTSE:.FTSE) is trying to claw back losses after a poor start. The FTSE 100 is currently slightly down by 0.06% at 5,206.90 by 9:55am.

Lloyds Banking Group (LON:LLOY) is a full 3% down as the morning papers consider the implications of its exit from the Government Asset Protection Scheme (GAPS) and the associated rights offer.

Thankfully for Lloyds Banking Group support appears to be found around the current 88.89p level.

Lloyds Banking Group may have to pay out at least £300m in fees to investment bankers to underwrite its planned £11bn rights issue.

The rights issue is part of the banks increasingly concerted attempt to break free of the clutches of the state.

Barclays (LON:BARC) is 2.46% down as banks across Europe appear to suffer this morning.

Other than being in a losing sector, there is no pressing news on Barclays to justify the falls.

Analysts are talking of cyclical movements in banking stocks - which provides little useful information.

Market news


Housebuilder Bellway slumped to a full-year loss after one-off items, but it’s maintained the final dividend and is keen to start buying up land, especially in the South East of England.

International service company Serco Group announced that Chairman Kevin Beeston will step down the group’s AGM in May 2010. The group said it will now begin the process of appointing a new chairman.

There was some good news on housing and retail sales.

Britain’s housing market improved in September as demand continued to outstrip supply, with the number of surveyors reporting rising prices at its highest in well over two years.

The Royal Institution of Chartered Surveyors said the number of surveyors and estate agents reporting an increase in prices beat the number recording a fall by 22%. That’s higher than expected and the best since May 2007.

Meanwhile, the British Retail Consortium (BRC) unveiled the best growth in total retail sales since January 2008, although it warned that “we mustn't get carried away”.

UK retail sales jumped 2.8% on a like-for-like basis in September versus the same time last year, but September 2008 was particularly weak, hit by turmoil in financial markets and very wet weather. This year also included the Bank Holiday Sunday and Monday, last year didn’t.
Last Updated ( Tuesday, 13 October 2009 09:13 )