Financial Betting Articles

The bank reporting season enters its last week on something of a high. Good news has been pouring forth with dividends up and very few unpleasant surprises stemming from credit crunch write downs. It seems that the banks have kept on doing what they do best - making money out of retail banking. RBS and HBOS are expected to join the party this week, with bumper profits and dividend hikes of their own rumoured.

It has been something of a rollercoaster ride for the banking sector since last summer. There have been write downs (Barclays adding £1.6 billion to the pile this month) but most have avoided the bigger hits suffered by the likes of Merrill Lynch and UBS. The exception of course is Northern Rock, whose business model fell flat when the credit markets ran dry. But that aside, the British banks have been proven sturdy vessels in the credit storm. If the sector's shares recover as fear recedes, this will have a big impact on the FTSE.

The good management behind this success has protected the banks from predatory investment at knock down prices. While sovereign wealth funds have been gobbling up great chunks of European and US banks, the British sector has been largely unaffected. While the Qatar Investment Authority is considering a stake in RBS, this is only expected to be a sliver of the bank.

Indeed, the 'business as usual' profit making of the biggest banks turns them in to potential predators. Lloyds TSB made it plain in its post-results euphoria that it is on the look out for good opportunities. The shares of Alliance and Leicester, one of the smaller and more vulnerable banks, shot up over 6% on the news. Bradford and Bingley is another potential takeover target. With dividends up significantly and takeover talk adding grist to the rumour mill, things are looking rosy. The only sour note is the prospect that the banks might have to repay in the region of £900 million in unfair charges - that is one heck of a region!

More good news comes in the shape of positive UK retail figures. Crisis? What crisis - retail sales volumes for January were up 0.8% on the previous month. Six weeks on, the new year gloom seems to be clearing across the board.

But the City doesn't share this view. A survey of business confidence by the Institute of Chartered Accountants showed it had reached a five year low. It seems that downgrading of economic growth forecasts (to 1.8% for the EU and between 1.3% and 2% for the US) are preying on people's minds. Coupled to high inflation, (US January inflation at 0.4% was higher than expected) pessimism lives on to fight another day on the global financial markets.

Takeovers, end of year reports, economic data - rumours, facts and half-truths. Whatever way they take the market, turn it in to a money making opportunity at ChoiceOdds.com.

In the month between the year’s low (5,740.1) on January 22nd and the close on Friday, the FTSE has added 2.59% to its value.

The DAX closed lower on Friday than it has for 9 trading days.

The DOW traded in a 454.19 tick range in the four days it was open last week.

Walt Disney has won more Oscars than anyone else – he was nominated for 64 and won 26.

Back to "Articles"

Open Account