Analysts give a cautious welcome to Lloyds bank rights issue
Analysts in the UK have given a cautious welcome to the Lloyds bank rights issue which at £13.5 billion is the largest in UK stock market history. The vast majority of analysts are advising shareholders to take professional advice regarding the situation and their specific circumstances although ultimately the £13.5 billion in question has been underwritten and will be available to Lloyds bank whatever the take-up is amongst existing shareholders.
The rights issue itself does not come as any shock to investors in the UK because it has been the subject of intense speculation since it was first mooted some weeks ago. The company had a number of regulatory and legal hoops to jump through before it was able to confirm the final make-up of the fundraising which will also bring in a further £8 billion-£9 billion via a bond exchange program. This should be more than enough to replenish the weakened Lloyds bank balance sheet and allow the company to escape the clutches of the UK government's asset protection scheme.
However, analysts believe that the short-term performance of the Lloyds bank share price is still very difficult to predict and when you throw in the ongoing difficulties in the wider UK economy it is easy to see why they have come to this conclusion. Professional financial advice should be taken before any investment decisions are taken.
Share this..
Related stories
UK investors looking away from deposit accounts
While the last 18 months saw a significant amount of investment funding switched from both property and stock markets into cash, there are signs that investors are looking to switch back. As UK base rates have fallen from 5% down to 0.5% there has been a significant reduction in interest payments received from cash on deposit. While opinion is split as to whether UK base rates will go any lower in...
Read MoreCharities struggling to survive
It has been revealed that more than a third of charities in the UK have no cash reserves to fall back upon and will need to introduce massive cost savings in the short term. Indeed there are fears that many charities in the UK will actually fold over next couple of years. However, plans by the UK government to "redistribute power" from the state to individuals could place more pressure upon the ch...
Read MoreGovt 'gives go ahead to flood plain housing'
The government is expected later today to give its blessing to plans to build homes on flood plains.Ahead of the publication of its green paper on the housing shortage affecting the country, housing minister Yvette Cooper said that houses would only be built in areas prone to flooding if the proper defences were in place.Her comments come after torrential rain and freak storms left large parts of...
Read MoreDo hedge funds operators hold the key to Cadbury future?
Richard Lambert, the director-general of the CBI, has today opened a potential "can of worms" with a suggestion that hedge funds operators and other short-term investors should have their voting rights curtailed in relation to the ongoing potential takeover of Cadbury. It would appear that there are things happening behind the scenes with regards to Cadbury as the share price has risen substantial...
Read MoreDavid Cameron set to introduce laws to reduce Parliamentary privilege
David Cameron will this week set out plans to introduce new laws which would reduce Parliamentary privilege if the Conservatives gain office at the next election. This follows suggestions that three of the four politicians charged with false accounting by the police may well try to invoke the 1689 Bill of Rights and use Parliamentary privilege to avoid a criminal trial. Yet again David Cameron...
Read More