Newspaper article The Evening Standard (London, England)

Banks Stage Fightback as Shares Start to Rally

Newspaper article The Evening Standard (London, England)

Banks Stage Fightback as Shares Start to Rally

Article excerpt


BANK shares featured five of the 10 best performers among blue-chips today as they made the most of a muchneeded rally in the aftermath of the market's recent sell-off.

But brokers were asking themselves if it was a case of too little, too late.

Today marks the close of Barclays' [pounds sterling] 4.5 billion fundraising exercise by way of a placing with sovereign wealth funds at 282p. This morning its shares continued to trade at a discount despite rising 16 1/4 p to 283p.

But HBOS's [pounds sterling]4 billion rights issue, which closes tomorrow, remains underwater.

It is offering existing shareholders extra shares at 275p. That compares with the current share price of 267 1/2 p, up 13p.

Private investors account for around 26% of HBOS's share register and it is now looking as if most of the issue will be left with the underwriters, which could see them nursing a loss of more than [pounds sterling]500 million.

Dealers said there were signs this week's sell-off had been overdone, so the appearance of a few bargainhunters ahead of results later today from Merrill Lynch in the US lifted the tone.

Also going better was Lloyds TSB, up 20p at 304p, which continues to yield 13% and has been tipped as a possible counterbidder for Alliance & Leicester , up 13 1/2 p at 330 1/2 p. That compares with terms worth 317p a share from Spain's Banco Santander.

Royal Bank of Scotland, which completed a [pounds sterling]12 billion rights issue in the spring at 200p a share, rallied 13.8p to 178.8p.

Shares generally bounced back following several days of heavy selling. A strong performance by Wall Street overnight set the trend. The FTSE 100 index rose 81.9 to 5232.5 in thin trading.

Cable & Wireless marked time at 152 1/2 p, despite Lehman Brothers raising its rating from equalweight to overweight and its target from 190p to 200p. …

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