Sector movers: RBS, Lloyds lift banking sector on FSA decision
Wed 10 Oct 2012
LONDON (SHARECAST) - Banking stocks finished strongly on Wednesday after it was revealed that the Financial Services Authority (FSA) has eased certain capital buffers.
Banks will now not need to hold extra capital against lending that qualifies for ‘Funding for Lending’, meaning that loans given under the government’s scheme can be effectively classed as risk-free.
Meanwhile, according to The Financial Times, the FSA has also allowed banks to hold a fixed “numerical target” for capital instead of the 10% core capital ratio imposed by the Basel III rules.
Royal Bank of Scotland (RBS) and Lloyds closed with decent gains in London.
In other news, RBS has raised around $1bn from selling two building in Frankfurt and Berlin to Axa Investment Management, according to rumours.
Meanwhile, Lloyds is apparently close to selling off $2.6bn-worth of Irish real estate loans with US investment firms Lone Star Funds and Kennedy-Wilson Holdings among the remaining bidders.
Heading the other way: technology stocks were the worst performers of the day today with chip groups Imagination Technologies and ARM Holdings both out of favour.
Imagination Technologies suffered steep falls after Credit Suisse initiated coverage of the stock with a ‘sell’ rating on the back of “increased competitive pressures”.
The broker said today: “Imagination is a $2bn system on chip graphics provider that has seen its share price rise 10-fold over the past four years on supplying graphics processors to the smartphone and tablet industry. However, we see ARM Holdings increasing its relevance as a competitor in this space with a full complement of graphics capabilities at half the price.”
ARM Holdings also fell after Credit Suisse started coverage of the shares with a ‘neutral’ recommendation, saying that a “lack of near-term catalysts” offsets ARM’s “strong earnings reliability”.
Top performing sectors so far today
Electricity 8,881.23 +0.37%
Real Estate Investment Trusts 2,073.64 +0.10%
Banks 3,958.57 +0.08%
Forestry & Paper 7,006.77 +0.08%
Insurance (non-life) 1,579.39 +0.04%
Bottom performing sectors so far today
Technology Hardware & Equipment 762.19 -3.13%
Industrial Metals & Mining 2,632.37 -2.96%
Health Care Equipment & Services 3,698.58 -2.42%
Construction & Materials 3,254.86 -2.28%
Industrial Engineering 7,502.79 -2.14%