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"Based on disclosure, the current situation is that there is a 99.5% long position and a 0.5% short position."
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Hi LTI,
I hold LLOY, but the assumption above ought to be qualified. It's far from certain. As you know, there are many hedge funds taking long or short positions at any one time. But legally they only need to disclose them if 0.5% or higher. It's quite possible that there are a number of other short positions from other hedge funds below 0.5%. But collectively that could still be significant. We just don't know.
I'll add: while LLOY is a barometer for UK's wider economy & that faces huge challenges, what's happening now is widespread. There are many other FTSE stocks & various sectors getting badly hammered no less. Compare FTSE 100 with the US where they've recently seen successive record highs (be that largely because of tech stocks). Or the DAX or HangSeng, et al. Of all main global indexes, this one has performed relatively poorly for years, with brief exceptions. Now struggling to hold even 6000 after starting 2020 over 7600.
While sterling is showing surprising strength, which tends to hit some 2/3rd of FTSE stocks with global interests who earn profits in dollars, the added huge loss in dividends for many FTSE stocks has made them less attractive.
Frankly, the index is also riddled with too many fundamentally weak stocks that hold a lot of unproductive debt & have little-to-zero growth prospects. Really, a bit of a dog index.
I continue to hold LLOY hoping that much known risk may be priced in. As long as support at 26+ holds, a level tested a few times, that continues to apply. So I'm not that concerned by MW's short. Hedge funds also call it badly wrong like anyone else. - Regards & GLA.
"when barclays is one of the few ftse100 companys showing PROFIT and taking up the CET Ration to over 14pc and making SENSIBLE provions for losses they still get hammered just shows how loathed they are by the MMs they should start making battery run cars the market would wet themselves."
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Hi Info,
I've yet to see proof how the SP of a large volume FTSE stock can be artificially held down by MMs. LSE stocks are traded via the SETS electronic system with little MM input.
I hold here at 115+ & 105+. Added today. Disappointing market reaction despite a cautious outlook considering if not for COVID-19 provisions, BARC's half-year profits were up by 27%. To me that's more than decent underlying progress.
Also, what we're seeing has nothing to do with BARC alone. It's about a still-evolving global issue affecting many sectors. But I'm confident BARC will be much higher again later when things calm down. Especially when we get more info on divi resumption. - GLA.
Chris,
The gist of what you say isn't without merit. The days of floor traders have gone. Most trades now are initiated via high-frequency trading algorithms. Hedge funds with billions in resources use these to seek out dominant market trends to add to heightened volatility & irrationality. They make huge profits both ways, long & short.
The typical retail investor/trader (the myriads like you & I) are pulled about all over the place from the sheer stress of it all, with many selling out at loss near the bottom. The hedgies scoop up the cheaper shares & later on the process repeats.
But as we are where we are & have been for some time, whilst nothing is getting banned or seems likely to change, what do we do? When buying any stock, IMO, always prepare for worst-case scenarios & ask yourself if you'd be prepared to hold it through any sharp downturn? Many stocks with strong fundamentals tend to recover well over time. However, there are also many exceptions where entire sectors will never again see a return to previous highs.
You won't be alone with holding significant paper losses, not to mention all those who've seen dividend cancellations costing them thousands of pounds of previously guaranteed income. This game can be very hard when it goes wrong. But if you're in it for the longer-term, you'll know that over time markets tend to recover.
Where else to put one's cash? Certainly not into savings accounts as interest rates are rock bottom & have been little better the past decade. - GL & take care.
Hi Reader61,
Thanks. You're right. A lot of it due to Liberty Global acquisitions. But it still seems a significant increase in debt considering the macro uncertainties ahead are so great that they've pulled guidance for 2021, bar indicating it's likely to be, to quote, "flat to slightly down”.
Reportedly, mast sales will raise about 18 billion Euros. I think that was priced in when announced last year. But that'll also mean taking on permanent added charges in renting them back & it leaves the stock's NAV considerably diminished.
That's the slippery road of taking on too much debt & previously paying overly-generous dividends. You leave yourself forced to sell-off valuable assets.
Still, I genuinely hope that you & other holders continue to see progress here that can be consolidated. All the best!
A VG day for long-suffering investors & glad to see the dividend has held. But whilst some are now getting excited about more upside in SP, anyone concerned that VOD's forward guidance is "lower" & their net debt is up from 27bn Euros to over 42bn Euros? Not a dampener, but just curious. - GLA.
Hi Toff,
An excellent call! Well done. I'm not sure where the bottom is here, but realistically it's long road for meaningful recovery after today's news regarding the dividend suspension until 2022 & then a rebasing. I think many saw some cut as probably likely, but not to this degree.
FWIW, I genuinely feel for shareholders as I have my own huge paper losses & cancelled dividends elsewhere. Latter alone has cost me thousands of pounds that I'd virtually taken for granted until late March. Very difficult times on a few levels. - GLA.
A mixed bag, but probably largely not unexpected. No surprise about FY Guidance removed as we've too much uncertainty ahead due to COVID-19's wider impact.
IMO, the next set of results will be more telling as to how LLOY & other banks stand. Lockdown only kicked-in in March. - GLA.
2227,
Valid points. The FED & other Central Banks are effectively rigging markets via unprecedented levels of stimulus. Whilst this reflates asset values whatever the economic realities, it invariably devalues currencies leaving most people much poorer.
As it stands, the FED especially seem intent on printing as much stimulus as it takes, regardless of consequences. Something Trump welcomes. But it's a short-term fix that's likely to lead to further long-term problems.
Let's hope that LLOY can deliver some good news today that sees more gains & consolidation, though as a holder I think whatever happens today all banks are far from out of the woods. - Take care all!
Indeed. Also, many LLOY shareholders well recall 2008's crisis when their well-run bank was pressurised by a then-Labour government to absorb highly toxic HBOS. That did the wider nation a huge favour, but many LLOY shareholders never recovered the consequences since then.
Though that was before my involvement in markets, one quite appreciates why many LLOY holders are now feeling very disappointed & angry by this latest setback. Cancelling the interims: okay. But the final divi at a time when housing markets & much else will be in limbo for months & lending from banks minimal, is just another severe blow to many.
They said, UK banks are far better capitalised now than any time since before 2008. If that's true, why the divi cancellations.
Take care all.
Richard,
Considering this latest hammering for shareholders, I must agree with you. Many of us saved hard, but seen interest rates gone to pot. Largely as banks don't need savers thanks to hundreds of billions of QE, which also hugely boosted their profits.
Now, with little lending being done thanks to housing markets & much else in limbo, this divi cancellation is just a way of banks further boosting profits. Will Directors see overly-generous bonuses slashed on the same scale as shareholders are hit? No chance!
So I agree. Spend what you have on whatever takes your fancy. In retirement, claim all you can off the state. Because when we try our best to make our money work for us in other ways, we still end up being cheated out of any growth. - Take care.
BlueBaron,
You've nailed it on the head. It's not as if they'll be doing much lending for the foreseeable future, what with housing markets & much else in limbo. So shareholders hammered again, but no doubt any bonus-cuts for directors won't be anything like as severe.
Fair to say that there's now little-to-zero incentive to buy any UK banks for the foreseeable future. I say that as a huge LLOY holder & some BARC. - Take care all.
Hi Toff,
A quality balanced post. I added more LLOY this morning at 39+. Will add more later. I'm glad to go against the herd.
As we know, the background to this global panic hasn't anything to do with any one stock or any one sector. Almost everything is plunging UK-wise & globally. People are losing their heads. Near-hysteria has overtaken all reason.
For those who stay calm & resolute, after this year we will look back on these days as great opportunities that have seen us well-rewarded. Things may well get worse before they improve, but the recovery from current levels will be huge. We just need to ride it out. - Regards & GLA.
Hi Newbie642,
I appreciate where you're coming from. Seems a plan. Reduce your average, sit tight & hopefully take a decent profit as available later when many stocks will surely be higher again.
Shorter-term concerns would be that not only has support gone, but recent falls have seen some heavy daily volume. With much else being sold off across the FTSE, that's never a good sign.
On the plus side, some of the recent falls here have left price gaps above. Technically, many such gaps tend to be filled over time. Ditto for VOD when the algorithms switch back to long to buy it back up. Seems a question of time. - GL.
Hi Fleccy,
I hope you'll be proven correct, though I can't see how further delaying matters doesn't have some negative impact in view of how much VOD invested in 5G.
Naturally, I wish you & all holders the very best of luck in seeing a turnaround here sooner than later! I doubt anyone here will be selling at huge loss at these levels as you're all more savvy than that. - ATB!
Typo corrected. Actually €200m (Euros).
Hi Fleccy,
I mentioned some impact from this virus on the rollout of 5G. Also, possible disruption to supply lines in China. VOD already declared a hit of about £200m last month due to wider delays with stripping out Huawei from the core 5G network. They also have less wiggle room than some stocks to see these costly setbacks.
It might seem illogical to many if it did drop to £1, but we face challenges whose wider repercussions still remain uncertain &, IMO, probably will do until the USA finds a floor. Sentiment is the main driver for now.
The 118.70 SP is of course incorrect as LSE has a technical issue. It's lower. Support levels have gone. All it needs is the dominant algorithms to continue selling it down, taking out long stops, to increase fear & selling momentum. There will be bounces in SP, but can they hold without strong buying from funds? This applies to other FTSE stocks no less. Little logical about it, but that won't necessarily see a recovery for many stocks anytime soon. - Regards.
Toff,
We're probably very far from alone as LLOY was, & IS, increasing its yield despite paying out a huge £21 billion+ in PPI over recent years. That indicates a stock with solid underlying progress, be it temporarily undone by this virus. All banks badly hit recently without exception. IMO, all will be much higher again when this crisis bottoms out. Could be a while though with no vaccine due until well into next year. But LLOY's yield is now very attractive & I may continue to reduce my average there until recovery.
I still post on ii, but much less so these days due to an increase in academic bickering about certain political events. Little point to it, other than scoring points. Few people change their minds about anything.
Agree about FTSE 100. I think this index suffers badly for just having too many fundamentally weak stocks that either hold huge debt or/and pension deficits, involved in sectors that continue to see competition rising & profits falling or under pressure. Hence the gradual exodus for some stocks even well before this virus unsettled markets.
I wouldn't advise anyone to sell any stock at these levels, but I think folk need to be realistic when SPs recover. Some of the highs seen previously may not be seen for years, if at all. - Regards.
Hi Toff,
Well done! A VG call & with sound reasoning to boot. - I sold at 151, July 2019 (posted here). So typically missed subsequent intraday highs of circa 169 in November. But I never regretted it! VOD's debt was increasingly a concern to me. Also, one rarely sells the tops or buys the exact lows, bar from pure good luck.
Bought LLOY with my VOD funds at 52+ & sold that at 67+ in December. That said, all I hold now will be for the L/T as though my averages aren't high, everything has tanked this past 2 & 1/2 weeks. So I very much feel others pain.
Still hold some cash, but reluctant to add anything more in this climate. Today's rates-cut & budget has done little-to-nothing to boost market confidence. So we can only wonder how bad things may get from here for many stocks? I don't think anyone really knows at this stage. Until this virus's economic & financial impact peaks in USA, that uncertainty may continue a while yet. - ATB!
Mandrill,
Indeed, COVID-19 is exerting a wider sell-off. A lot of the sentiment-driven. No logic needed. However, there are germane reasons why VOD is not as immune as you assume.
Many tech companies rely on untrammelled cheap production lines based in China. That's where VOD make their phones. It's also been reported that 5G roll-out is likely to be disrupted due to COVID-19's spread. Not good for any heavily indebted stock that's invested heavily in 5G. - GL.
Hi Toff,
Much agreed. I feel for holders here. Generally, a good bunch of people. I was fortunate to sell out at 150+ at significant loss, as posted here months ago. But all you say about the FTSE (DOG) index is spot on. When the DOW & other global markets make new record highs, as we've seen many times just the past 2 years, the dog index FTSE 100 rarely follows. When USA sells-off, the FTSE always follows 100%. That's even if it wasn't very high, relatively speaking, to begin with.
It just underscores what a fundamentally weak index the FTSE 100 is, with a few exception. I fear that many of its constituents will seriously struggle to recover to anywhere near even recent highs, let alone L/T highs.
As for VOD: as you all know, all support levels gone here, as for many other FTSE stocks. Holders will need to sit it out & perhaps target lower levels to get out when it finally recovers some of its losses, which it will do when this COVID-19 panic settles down. But things may well get even worse before then. - Regards & GLA.