Ireland debt woes spur increased retail trading of bank stocks
TD Waterhouse: "Retail investors focused on the banking sector this week as they weighed up the implications of UK banks' exposure to Ireland. Bank shares dipped on Thursday 11 November after the European Commission announced that it was prepared to act if Ireland's borrowing costs continued to rise, sending the FTSE 100 down 2.4%. TD Waterhouse customers mostly took this as an opportunity to buy bank shares, with the top ten bank buys outnumbering top ten bank sells by a ratio of 2 : 1 in the week ended Tuesday 16 November.
"Royal Bank of Scotland (RBS) was the most bought stock, accounting for almost 20% of all top ten buys, and the second most-sold. RBS experienced the sharpest initial drop on the day of the EC announcement, which analysts and traders attributed to its significant exposure to Ireland. In the third quarter, RBS' Ulster Bank unit posted a £176 million loss, and stress tests in July revealed that RBS had a £4.3 billion exposure to Irish sovereign debt. RBS shares recovered some of those early losses during the week, however, with the bank announcing on Monday 15 November that it had signed a non-binding agreement to sell around £3.8bn of project finance assets to Mitsubishi UFJ.
"Lloyds (LLOY) was the most-sold stock and second most bought by TD customers this week. The black horse bank outlined plans to spin off its private equity arm on Tuesday 14 November, saying that it would begin to raise capital from third-party funds by 2013. Meanwhile Barclays (BARC), took fourth place among both the buys and sells.
"Apart from banks, oil explorers continued to be a draw for TD Waterhouse customers. Victoria Oil and Gas (VOG) was the most notable entry of the week, in third place on both the buys and sells tables. The oil explorer has attracted increasing interest since last Monday 9 November, when it announced strong annual results and predicted that it would start to deliver the first gas from its Logbaba project in Cameroon in the first quarter of 2011."