Member Info for JEverettMillais

Yes JPM was referring to the US market only, that was the example I put forward as that's where the interest rate rise is. But I hear what you are saying. As I say will watch closely and see how the rate rise effects US banks. We will probably follow in the summer. JEM

Yes there is fluctuations in share prices in EVERY year ( this one more than most). You were implying that 1987 was as good a year as 2009. You conviently left out 2000 to 2002 when the stock market lost more than 60% of its value. Fact in 1987 the FTSE was up just 2% and 1986 was up a good 19% so where was the crash followed by the big rise in 1987. Think maybe your mind is playing tricks on you.

if a 0.25% rise in interest rates will cause mortgage and company loan defaults I would be amazed. Remember to most mortgages are fixed rates for 2, 3 to 5 years. As I said previously JPM have stated that a 1% rise would generate $2.80 billion in extra income, don't take my word for it, Google it. We are now entering a new phase of normalised interest rates, possibly about 1.5 to 2% in a couple of years. Remember banks are much leaner now than pre 2008 and with the extra income generated by interest rate rises will be a massive boost to profits. The good thing to is they don't have to do anything to benefit from this income, no extra staff etc., just pure profit. As I said previously, an interest rate rise for banks is the same as an oil price rise for oil companies. Much as I would like to claim that I made up this statement. It is a well known statement in financial circles. How can an extra $2.80 billion a year (JPM for 1% rate) be a bad thing. It's a no brainier. Let's wait and see then what effect it has on US banks share prices. JEM

Not sure where you get 1987 from, the FTSE that year was up only 2% and it didn't crash the previous year (1986) as it was up 19%. There are plenty of other examples of the FTSE crashing after that date, mainly after the dot com bubble burst after 1999.The FTSE actually dropped three years in a row. In 2000 the FTSE down10%, in 2001 down 16%, and in 2002 down 24%.

Remember this is still AIM so anything could happen with the share price. The BOD have been first class here but have to say with the cyber attack, JL selling shares and now CVC following, don't feel as confident as I did. Most of what's happened was out with the BOD control but still ....

Think it may have further to fall. Time will tell.

Impeccable timing of JL selling his shares. Did he know about this?

All banks have basically struggled in this low interest rate environment. Interest rate rises are the key IMO. Yes there are other factors, litigation, ring fencing, stress tests, world events out with our control etc. etc. but all that aside (yes all that could have a big effect), increased profit on higher interest rates means bigger dividends. This in turn attracts more institutional investors, leading to a hopefully higher share price. I suppose at the end of the day it is not rocket science. Let's see what happens to the US banks share price after Yellen's announcement next week, even though it is almost certain. Still think you will see a good 2 to 3% rise and with further rises a gradual re-rate of US bank shares. This historically has been the case with interest rate rises previously. Hopefully we may see a bit rub off on GB banks. Just my humble opinion and respect others views. As they say, time will tell. JEM

Yes I do, given an interest rate of around 2% in two years time. Remember the higher the interest rate the more profit RBS will make, that is a given. It would easily add a billion pounds a year to RBSs bottom line (probably more). When interest rates are normalised (for want of a better word), it will be the banks time again. JEM.

Yes agree. While a gradual rise in interest rates over the next couple of years to say around 1.5 to 2% will not help mortgage payers etc. It will be a good thing for savers and assuming a normalisation of inflation to around 2% it will in the end help people with mortgages. Normal inflation means a healthy rise in wages and house prices. People can then see their property increasing in value, which helps the economy with people moving or renovating their existing property, in other words spending. Zero inflation helps no one. Obviously banks will benefit greatly with higher interest rates. If we do have an interest rate rise starting in the middle of next year and rising gradually to the rates mentioned above, could easily see all the banks doubling in value in 4 to 5 years. Just my opinions. JEM

Higher interest rates are the biggest earners for banks. An interest rate rise for banks is equivalent to the oil price going up for oil company's. For instance JP Morgan have said that a 100 basis point rise would add $2.80 billion profit per annum. $700 million for a quarter % rise, not bad. When Yellen raises interest rates by 25 points next week, (100% certain) it won't stop there, it is expected they will rise by 25 basis points every quarter, this time next year will see it around 1%. Not sure how much it will help RBS and other GB based banks but am sure they do a lot of US and dollar related business. JEM

Looks like another bloodbath on the FTSE tomorrow. DOW gone from 200 points up to 100 points down in less than 2 hours.

Last trade before the bell was at 369.36. UT 364.25. What a joke.

That 750 is clearly a mistake. If you notice Credit Suisse still have RIO as neutral. Would hardly be neutral at that price. Ignore it.

Yes good idea. Haha

Thanks for that humblebynature. Would have been a bit of a laugh if they had been found to have manipulated the oil price given how low it is. JEM

WTI and Brent now down 6% and 5% respectively. Chevron surprisingly only down just under 3% at present.

Remember Shell is better placed than most oil companies to ride out the low oil price, with its oil refinery business which is generating a lot of cash. The BG merger will negate the need to spend large amounts on new oil and gas discoveries as they will be acquiring more under the deal, so big savings there. On the purchase of BG shares, if you already own RDSB shares you are in effect hedging your bets. If the merger doesn't go ahead your BG shares would drop in value but your RDSB shares would probably rise (as analysts think that She'll has paid to much for BG). So probably a good idea to be in both. That does not stop both share prices dropping in the meantime. JEM

DAX up 200 points, the FTSE up 10 points. The DAX up 15% this year the FTSE down 2%. There lies the problem with this a most FTSE 100 shares.

Unfortunately it doesn't matter what anyone here thinks, it's how the market reacts. The share price dropped around 1.5% on the news, down towards the close. I personally think it will have a negative effect on the share price and we could see a further drop tomorrow, may even down to the mid 350s. However if it does fall am sure it will be temporary and will return to the 370s by middle of next week. Good time to top up then, if funds available. Just my opinion. JEM