Investors look to profit from Bradford & Bingley’s woes

Volatility in financial services sector opens up opportunities, Angus Rigby, Chief Executive Officer, TD Waterhouse comments: “Bradford and Bingley kicked off the reporting season for the banking sector with a mighty bang on Wednesday with its full year results. The Company saw 23% sliced off its share price after Chief Executive Officer Steven Crawshaw said bad loans had more than tripled to 22.5 million pounds in 2007 and alluded to further writedowns.

“In an already uncertain climate, investors and analysts were rocked by news of the Company’s subprime exposure and given a sour taster of what could be in store for UK banks over the forthcoming months. Despite these reports and talk of gloomy housing predictions, which could dent mortgage sales, our customers looked to profit from Bradford & Bingley’s woes and the stock equated to almost a quarter (23%) of all retail investor buys this week. The majority of these trades were made yesterday when the stock plummeted to an all-time low.

“TD Waterhouse customers also turned their attention to another bank this week, taking profits from Northern Rock after the government asked two of its suitors to up their ante or up sticks as it would be forced to nationalise the bank. Richard Branson's Virgin group is said to be the bookie’s favourite, ahead of an in-house management team led by former investment banker Paul Thompson. Shares in Britain’s fifth-largest mortgage lender slipped 0.5% and are trading down by more than 90% year on year.

“Aeroengine provider Rolls Royce was popular amongst our customers after the Company signed a $880m deal to provide Trent XWB engines for Synergy Aerospace. However this contract and the recent 13% hike in profits have done little to please some of Rolls’ analysts who have aired concern over the future of airline profits in the current economic climate. Shares are trading down more than 10% on last month after a public slamming following its preliminary results.”