RE: Re-entry15 Mar 2023 12:45
IR,
very difficult to put an entry point on this.My strategy is to buy in say 15/20% tranches with my initial entry point at 8.50.
I came across news from the States on monday that Credit Suisse may have liquidity problems and this morning their leading shareholder announces their holding cannot exceed 10% !. No smoke without fire. Too much of a coincidence for me.
All commentary up to now has been on the benefit of interest rate increases to revenue of Banks. I believe this is now at an end for following reasons ;
1. Increasing rates , with rising utility bills, are hitting individuals nett income.UK Banks have already increased their bad
debt provisions for 23 in their 22 year end accounts. I would not be surprised to see more attention given to this as year
progresses especially as the ECB have stated further interest rate increases to follow.
2.The root cause of the 2 recent Bank failures in THE US didn't happen overnight with pressure from falling Bond
prices resulting from rate increases squeezing their balance sheets. If rate increases not at an end, and not likely to fall in coming 18 months, this Bond price pressure can only intensify with increasing interest rates.
A lot can happen within that time period.
I have posted twice here that in June 2022 Birg mkt value was 6Bn and in Jan/Feb was 11 Bn. 1 of these 2 valuations are totally out of sync ,the question is which 1.