TD Waterhouse customers dial up Vodafone shares

Angus Rigby, Chief Executive Officer, TD Waterhouse comments: "It has been another interesting week in the financial markets with continued volatility driving our customers trading decisions, and Vodafone proving to be a popular acquisition with 12% this week's top ten buys.

"Could this turn into a shrewd move by customers following Vodafone's announcement yesterday that it intends to buy back £1bn of it's own shares? The company is keen to counter a sharp drop in value following it's subdued trading update on Tuesday, which resulted in Vodafone's shares falling by almost 14 per cent, the biggest one-day fall in the company's history. The move is still subject to shareholder approval but could prove popular to investors looking for a change from banks and housebuilders.

"Speaking of which, the UK's Banks continue to dominate our customers trading activity this week, accounting for over three-quarters (76%) of top ten sales and almost half (46%) of top ten buys. It is of little surprise that following its unpopular rights issue, HBOS features heavily in both columns, but it is interesting to note that buys out-weigh sells by almost 2:1.

"Market analysts have been intrigued by the behaviour of Morgan Stanley, one of the joint underwriters to the £4bn rights issue, which shorted a raft of HBOS stock to hedge their positions after the rights issue closed. Because of the surge in HBOS' share price on Friday, Morgan Stanley's 2.3-2.4% shorting was taken at a very attractive average price range and so the underwriter may yet see a profit on what was initially thought to be a disastrous outcome from the initial issue. Market commentators aired concerns over what may seem to be insider trading of sorts between the underwriter and activist funds, but the FSA has publicly stated that it was kept abreast of all Morgan Stanley's actions and gave them the green light.

"Continuing on the banking theme, The Royal Bank of Scotland represents a huge 22% of all top ten trades by TD Waterhouse customers this week, having jumped 8% higher in price after HBOS' rights issue the previous week.

"Finally, mention must again be made of property developers Barratt Developments and Taylor Wimpey. The housing market continues to slide and Taylor Wimpey is still ailing after it failed to agree a £500m refinancing deal at the start of the month. It is not yet clear whether it will avoid breaching its banking covenants if the sector continues to suffer and this uncertainty is borne out in TD Waterhouse customers trading activity on the group."