Anorak News | Financial Spread Betting: HBOS, Sterling Surges And Consumer Spending

Financial Spread Betting: HBOS, Sterling Surges And Consumer Spending

by | 20th, June 2008

HBOS, the country’s biggest mortgage lender, says it expects the number of houses sold across the country this year to fall by 45%.

And those houses that do sell will do so for “up to 9%” less than now.

Citigroup expects house prices to drop by 20% and volumes 50% by the end of 2009. HBOS and Citigroup are depressed. Banks are as bout as loved as, well, bankers. Shares in both banks are way down the on the year.

To raise money, HBOS is offering its shareholders two new shares for every five they already hold at 275p each. Last week the HBOS price was driven down by short selling to 258p.

Yesterday, the share price closed at 296.75p, a fall of almost 7 per cent. The spread is running at 296-296.7.

Standard & Poor has revised its outlook on HBOS to “negative”. There is, to quote, “clear evidence of deterioration in the riskier areas of UK mortgage lending. HBOs has £4.2bn in lending to the house building sector.

The bank’s chief executive, Andy Hornby, says the bank’s trading performance is “resilient”. But, then, he might well say that. Sometimes it’s hard to know what to believe, or think.

Swiss insurer Zurich has found in a survey that 36% of people do not believe that the credit crunch will have an impact on them.

In all, 43% of respondents said that they would not cut back spending – a figure which rises to 49% in London.

Credit crunch… What credit crunch? Of course surveys as the product of people with time on their hands to answer questionnaires.

And here’s data from the Office of National Statistics that says retail spending went up by 3.5 per cent in May. Wow, indeed.

Economists are looking to the Bank of England for a reaction. Some talk in the City of a quarter point raise in interest rates for August. But would the BoE react to one month’s figures?

And then there is sterling, which has surged in new of buoyant retail sales. Yesterday night, the pound was up 0.7 per cent against the dollar to $197.20, up 0.7 per cent against the euro to £0.7860, and up by 0.8 per cent against the Yen to Y212.90.

The Tradefair spread on the dollar to sterling at £197.04-197.07, is well worth a look.

– The Anorak writes on Money

Posted: 20th, June 2008 | In: Money Comments (2) | TrackBack | Permalink