Halifax shares gain 17 per cent
Halifax Bank of Scotland shares gained by as much as 17 per cent today after it was revealed that the banks management bought £6 million in Halifax shares. This was the best one day gain since the Halifax became listed in 2001 - it was obviously seen as a vote of confidence in the bank following last week’s rumours that it had serious funding problems and was in trouble.
It has been a good day for other UK banks with Barclays up 9.3 per cent, Royal Bank of Scotland was up 8.3 per cent and Lloyds TSB was up 6 per cent.
Following the peak of a 17 per cent gain Halifax steadied out at around 13 per cent. The uplift was because of the improved offer for the troubled US bank Bear Stearns. JP Morgan Chase has increased it’s offer to $10 or £5 a share from $2. This seems to have had a releaving affect on worldwide markets following the fall of one of Wall Street’s biggest banks. The Bear Stearns fall was because of it’s risky sub-prime mortgage lending which led to other banks refusing to lend it any more money, and this caused major panic in stock markets accross the world.
Then last Wednesday rumours spread that HBOS was in trouble and that the bank had gone to the Bank of England to secure additional funding. See the blog; http://www.thefinancialblog.co.uk/fsa-to-investigate-share-trading
As the blog post says the FSA - Financial Services Authority - is going to investigate these rumours to try and establish if they were spread deliberately.