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It has been revealed that the Chancellor Alistair Darling held talks with some of the UK largest banks yesterday in a bid to try and avert a banking crisis in the UK. The meeting was attended by...
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Sunday 29th June 2008
Even though they are not directly linked to the way in which the stock market works and the procedures used, it seems as though the movers and shakers at Number 11 Downing Street have taken it upon themselves to suggest changes to the current system. While some are a little surprised at the move, the City seems to be giving the idea its backing as the timescale and cost of the current rights issue process is long and very expensive.
The Treasury seems to have plumped for the Australian version which allows companies to raise funds from institutional shareholders at short notice, prior to offering private investors the chance to participate. This allows the companies involved to receive their funds quicker and also makes the need for a costly prospectus redundant.
The move in the UK seems to have been prompted by the recent turmoil in the banking sector which saw groups announce fund raising exercises with the full backing of shareholders only to see market sentiment change and many share prices come under severe pressure. There is also talk that the Australian system would also reduce the long term drip feeding affect of short sellers who have been causing havoc in the markets of late. |
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