Buys surge as big banks ponder PPI payouts
Darren Hepworth, Trading and Customer Services Director, TD Waterhouse comments: "TD customer buys almost trebled this week as investors enjoyed their first full week of trading since breaking for a series of bank holidays. Financial stocks accounted for 55% of our top ten customer buys as Britain's major banks abandoned legal challenges surrounding compensation payments over the mis-selling of payment protection insurance (PPI) on Monday (4 May); the Financial Services Authority later calling for customer pay-outs to be sped up.
"We saw heavy trading in Lloyds Banking Group (LLOY) this week - the lender accounting for a third of the top ten buys - re-establishing itself at the summit of the table and rising one place to third in the sells. The banking giant announced a quarterly loss of £3.47bn on Thursday (5 May) after it set aside £3.2bn for compensation payments over the mis-selling of PPI.
"Notable newcomer to the buys, HBSC Holdings (HSBA), entered the table in fifth place after reporting a 14% drop in first quarter profits on Monday (9 May) having also earmarked £269m to cover PPI compensation. Royal Bank of Scotland Group (RBS) re-appeared in the top ten buys in seventh place and climbed four places to second in the sells, having announced its own £850m PPI provision on the same day. This is in addition to the £100m it has already paid PPI customers so far. Barclays (BARC) dropped to third from first in the buys, its PPI provision totaling £1bn.
"While TD customer buys were dominated by financials, oil stocks accounted for over 65% of the top ten sells. Xcite Energy's (XEL) share price took a hit after an independent report into the commercial value of the oil explorer's Bentley field disappointed analysts. The company's share price tumbled from its opening price of 322.2p on Tuesday (10 May) to a low of 182p, before recovering slightly to 199.5p by the end of the day.
"Victoria Oil & Gas (VOG) entered both the buys and sells tables in eighth and fourth places respectively. The AIM-listed oil and gas company gained approval from the Cameroonian government for an exploitation licence to start gas production on the outskirts of Douala in the west African nation.
"Finally, Pace (PIC) took a pasting Tuesday (10 May) as the set-top box maker issued a shock profit warning, stating that the Japanese Tsunami had hit its supply chains. The company entered the top ten buys at number six, its share price closing at 97.25p (Tuesday, 10 May) having closed at 153.26p the previous day."