Stopped out of the last % of long today (spread bet) but still hold some shares - although sadly not many. 25 MA breached on good volume - I'm going to leave this one for now as I'm not sure (enough) which direction from here.

Lloyds' shares set for falls, say experts
Tanya Powley -- 02.09.09

Lloyds Banking Group's (LLOY) share price could fall by 40% to 60p if the bank goes ahead with plans to raise 10 billion to reduce its dependence on the taxpayer, say industry experts today.

Reports suggest Lloyds has received the requisite support from some of its biggest backers in the City such as institutions and fund managers to raise 10 billion in order to make a partial withdrawal from the government's insurance scheme.

However, news service Reuters reported that Lloyds has not been actively seeking shareholder support.

Currently, this would cost the group a 15 billion fee to insure its 260 billion worth of toxic loans and also mean the government would increase its stake from 43% to 60%.

Chief executive Eric Daniels is said to be looking into an alternative that would see Lloyds insuring against just 130 billion worth of bad loans, therefore reducing the bank's fees.

Over the past year, Lloyds' shares have ranged from 33p to 298p. Shares in the group were down 5% this morning to 100.65p.

Market makers are predicting a spread of between 60p and 70p. One suggested Lloyds' target share price, if a rights issue went ahead, could be heavily discounted by as much as 40%, down to 60p.

"Lloyds has had a pretty good run on its shares recently. A rights issue would put pressure on the share price," he said.

David Buik, spokesman for BGC Partners, said he would prefer Lloyds to sell assets such as Cheltenham & Gloucester, Clerical Medical and Scottish Widows rather than go ahead with a rights issue.

This would downsize the balance sheet by a similar amount, he added.

"By selling these assets Lloyds could get at least 10 billion and that would be the job done. Private investors are already angry with what has happened with Lloyds. It has always been a boring bank until it got sucked into the deal with HBOS, which saw its share price plummet," he said.

A spokeswoman for Lloyds declined to comment.

I have shorted LLOY yesterday, RSI. I guess u r shorting it as well.

more journo rubbish they certainly know how to make it up, LLOY has so many great options now it certainly won't be a boring bank in future.

It will take time for LLOY to remove all surplus costs in the business post HBOS (not least for political reasons) but once they have done so, the ongoing business should be extremely profitable. With negligible interest currently being paid to depositors and lending margins becoming much healthier across all sectors, their future imo looks bright until the next banana skin appears - and without a large investment banking arm this would seem less likely for LLOY than for RBS or BARC. Always DYOR.

Agree LLOY has much more potential than the others, of course journos with little or no financial expertise can't see it... yet.

hlyeo98

re -I have shorted LLOY yesterday

I do not know how do you managed to do it at the top.

Maybe I shoud not believe a word of your postings

It appears Turner is determined to damage our banks as much as possible before he and his minnions are sent to the dustbin of history. The sooner responsibility for regulation of the financial sector is returned to the Bank of ENGLAND the better.

Another rights issue on the cards - bad news for long term holders - speculators will have a field day!

* UBS reiterates buy and 107p target for Lloyds Banking Group

why was ED allowed to destoy a first class bank . he stated 12 months ago that prove of the deal would be forth coming well we still have not had any clarification of the progress it is now time to boot out this worthless idiot out

On yesterday's EXPRESS


"Lloyds pressed on toxic-debts deal"

Surely unfair to blame management for the present situation. Any worthwhile take over costs more than one wants to pay but if as good as I beleive this one is, it pays hand over fist. In a year or two if the govt can keep their inept hands out of it Lloyds Group will be a super & hopefully remunative investment.

Were the government inept? I thought the banks lost their money in the market and went begging to the government for handouts.

I am sorry,I see what you mean, the goverment was inept by not allowing the banks to go into bankruptcy, and then buying them up at rubbish tip prices.

Damn,

capitalism in western world is still on brink......unions predict 4 million unemployed and analysts expect double dip recession with banks still knackered

how long before we decide enough is enough and we go communist? capitalism has failed!

marni, you wouldn't be trying to wind them up by any chance???

harry isn't he scotty "resurrected"?

Hmmm......that would explain alot!

Well well, banks are WELL on the UP today

and LLOY 107.75p +3p

wow 700p to 108p very good.