TD Waterhouse clients buy banks in midst of Ireland debt crisis
Darren Hepworth, Trading and Customer Services Director, TD Waterhouse comments: "Trading activity remained vibrant with a distinct buying trend, in a week when the Irish bailout began to take shape and tensions in the Korean Peninsula erupted into an exchange of fire. TD Waterhouse customers' buy trades outnumbered sells by a ratio of 2 : 1 in the week ended Tuesday 23 November.
"Banking stocks underperformed relative to the FTSE 100 as investors factored in UK banks' exposure to Ireland. Lloyds (LLOY) was the most bought and most sold stock, accounting for one in five of all top ten trades among TD Waterhouse customers. Its share price was down 5.3% over the week to 63.58p, having fallen sharply on Monday 22 November - the same day that Ireland's Green Party, a partner in the ruling coalition, called for a general election.
"Majority state-owned Royal Bank of Scotland (RBS) remained second on the sells list and dropped from first to fourth on the buys list. RBS is exposed to Ireland via its Ulster Bank business, and suffered a 4.6% share price drop on Monday 22 November. Barclays (BARC) - which has a relatively small £146m declared exposure to Irish sovereign debt as of March 31 - rose from fourth to third place among the buys and dropped from fourth to fifth place among the sells.
"Resources stocks accounted for the rest of the top ten buys and sells, with North Sea-focused oil explorer Xcite Energy (XEL) leading the pack. Buy trades of Xcite more than doubled, pushing it from fifth to second in the buys, after it announced that it has signed a binding letter of intent to purchase a deep water jack-up unit, designed for simultaneous drilling and production, from British American Offshore Limited. Xcite also climbed from fifth to third among the sells.
"AIM-listed oil and gas firm Range Resources (RRL) entered the buys in fifth and the sells in fourth, after reporting promising initial results from a survey of its licences in Georgia. Oil consultancy RPS Energy estimates that the area covered by the licences contains over 2 billion barrels of oil, half of which is attributable to Range under its joint venture with Strait Oil & Gas.
"Finally, Regency Mines (RGM) joined its associated company Red Rock Resources (RRR) in the top ten buys and sells, placing seventh among the buys and eighth among the sells, after both companies announced new investment plans. Regency will invest in Papua New Guinea's Direct Nickel Ltd, while Red Rock will invest in Central America-focused Ascot Mining."