Six minutes into the open of the FTSE, and three of the most systemically important financial institutions in the UK and beyond – Barclays, RBS, Lloyds – have not opened.
Admittedly, it’s because their share prices are set to mirror Wall Street and rocket – but so much volatility in the sector points to its weaknesses.
Finally they’re off:
BARC + 8.5%
RBS + 10%
LLOY + 8%
Scant comfort for HBOS however. Even though its up nearly 5 per cent, at 266 pence, it’s still well below the rights price, closing today.
8:24 Update Broker’s note from MFGlobal:
- We highly suspect that RBS has been significantly shorted primarily by the underwriters of HBS as a proxy hedge for tomorows failed HBOS placing.
- As the news on HBOS won’t be as bad as expected, then the hedge on RBS will have to also be taken off, as people will realize RBS’s 5 day 18.6% fall, vs HBOS’s -6% fall will be an extreme over reaction.
- RBS now trading on 0.4x book, HBOS 0.6x book, BUY RBS, the squeeze will be ugly.
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