Newspaper article The Evening Standard (London, England)

RBS Shares Fight Back from an Eight-Year Low

Newspaper article The Evening Standard (London, England)

RBS Shares Fight Back from an Eight-Year Low

Article excerpt


ROYAL Bank of Scotland staged a deadcat bounce today as concerns aboutits [pounds sterling]12 billion rights issue continued to sweep through the City.

The shares hit an eight- year low last night, falling perilously close to the200p at which the bank's emergency fundraising has been pitched to the City,but ticked 6p higher to 237 3 4 p today.

It offered some relief to chief executive Sir Fred Goodwin, although traderssaid there were still real concerns that underwriters Merrill Lynch, GoldmanSachs, and UBS will be left holding millions of pounds of stock following therights issue.

RBS has also been hit by the withdrawal of three bidders from the auction tobuy its [pounds sterling]7 billion insurance business, which includes Direct Line andChurchill.

The troubles at RBS have done little for sentiment in the rest of the bankingsector, with HBOS and Bradford & Bingley under particular scrutiny ahead oftheir own proposed rights issues. HBOS shed 3 1 4 p to 411p while B& B was up 34 p to 91 1 4 p.

The FTSE 100 index fell 6.8 to 6061.3, dragged lower by mining stocks. BHPBilliton was down 60p to 1900p, Rio

Tinto off 164p to 6016p and Xstrata 87p lower 3953p.

Goldman Sachs today came out in favour of housebuilder Taylor Wimpey, up 3 1 2p to 89p, having seen the stock lose 80% of its value since the [pounds sterling]5 billionmerger of Taylor Woodrow and George Wimpey little over a year ago..

It called time on the sell-off and upgraded the stock to neutral from sellalthough it did not change its 106.6p price target.

Such has been the carnage in the housebuilding sector, it looks set to lose itsfinal FTSE 100 representative next month as Persimmon , up 2 1 4 p to 489 3 4 pcrashes out of the top flight.

Housebuilding shares have more than halved since January last year and tookanother beating yesterday after mortgage lender Nationwide said house priceswere falling at the fastest rate since the recession of the early 1990s. …

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