Hedge fund traders turn against Lloyds bank
Lloyds bank shares are coming under growing pressure with the revelation that a number of hedge funds in the city are staking millions of pounds on the price of Lloyds bank shares falling in the short to medium term. It would appear that many analysts now believe the market is overoptimistic about the forthcoming European competition ruling and the imminent rights issue. As a consequence, the shares will come under further pressure over the days and weeks ahead, something which could possibly put the fundraising at risk.
As we mentioned in one of our earlier post, many analysts believe that Lloyds bank "missed the boat" with regards to a fundraising as the banking sector has fallen back over the last few weeks. As a consequence, investor appetite for new share issues in the sector has fallen and Lloyds bank, and possibly Royal Bank of Scotland, could be amongst two of the largest casualties.
However, as Lloyds bank has the support of the UK government it seems as though the rights issue will go through in some form and the company should be secure in the longer term. All eyes will be on the Lloyds bank share price over the coming days as we await confirmation from the EU and UK government regarding various issues.
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