Banking sector gains in run up to reporting season
Angus Rigby, Chief Executive Officer, TD Waterhouse Comments: "All eyes were on the banking sector this week, which accounted for more than two thirds (67%) of the top ten, in the run up to reporting season as the city giants brace themselves for another bonuses backlash.
"Barclays led the top ten sells with 32% as TD Waterhouse customers cashed in on its 9.29% hike in share price over the past week. Shares jumped 25.80p after the banking giant announced second-half profits had more than doubled on Tuesday (16 February), thanks in part to the sale of one of its fund management units. Trades in Barclays accounted for 24% of the overall top ten after its profit before tax exceeded market expectations at £11.64 billion - an increase of £6.08 billion on last year's figure. Following the announcement Barclays chief executive John Varley and president Bob Diamond quickly vowed to waiver their bonuses for the second successive year in an attempt to diffuse public anger over bankers' bonuses.
"Meanwhile, Lloyds Banking Group (Lloyds) led the buys, which were 19% ahead of this week's top ten sells, as its share price fell on Friday following confirmation of the bank's heavily anticipated plans to issue 3.14 billion new shares. Lloyds will place the shares through an exchange offer with investors in the final part of its £22.5 billion capital raising. The exchange will reduce the Governments stake in the bank from 43% to 41% while the number of outstanding shares will become 67 billion. Buys in the bank were 77% higher than sells as overall trades in Lloyds accounted for more than a quarter (28%) of the top ten. Last Thursday (11 February) the bank announced the appointment of Glen Moreno and David Roberts as non-executive directors.
"In the mining sector, Xstrata was the highest climber - accounting for 40% of overall top ten mining trades - after completing the sale of its 70% interest in El Morro SCM to New Gold for $463 million. Buys in the Anglo-Swiss miner were 33% higher than sells after its share price dwindled earlier in the week before going on to gain 49.50p over the past seven days.
"Miner Rio Tinto appeared in fifth and tenth place of the sells and buys respectively following the release of better than expected full year profits last Thursday (11 February) to the year ended 31 December 2009. Underlying earnings were recorded at $6.3 billion - outweighing analyst forecasts of $6 billion - but still lagging behind last years figure of $10.3 billion."