ROYAL BANK OF SCOTLAND GROUP PLC is within a rising trend. Continued positive development within the trend channel is indicated. The stock has broken up through the resistance at pence 50.00. A further rise to 100p (1) is predicted in the medium term. The stock is assessed as technically positive for the medium long term.

Good luck -

Im not saying invest or not, just put down some collective views from this weeks investment mags. AUDYOR.


Caution needed mentioned in several investment mags this week.
Direct line is carrying at the half year stage of claims to premiums of 101%, so carrying a underwriting loss.Motor cover being Direct Lines core business (41% of premiums collected) and prospects looking weak there. The competition regulators are looking into the motor market. The OFT reckons that ''competition appears not to be working effectively in the private motor insurance market'' The competition commission has up to two years to report.

The price range suggests that Direct Line will be valued roughly around its reported end June net tangible assets of £2,5 billion. Thats not pricey. Earnings will struggle for growth and sentiment could suffer as regulators probe the motor market- leaving near-term, post flotation upside looking hard to spot.

MIDAS: Direct Line float looks tempting, but steer clearBy Simon Watkins
PUBLISHED: 00:28, 7 October 2012 | UPDATED: 00:29, 7 October 2012
Comments (2) Share

..The sell-off of Royal Bank of Scotland’s Direct Line Group insurance arm is the biggest share offer for some time and has set many investors’ pulses racing.

But they should beware of being swept up in the deal.

Direct Line Group is primarily targeting institutions, but a number of stockbrokers are offering a facility for individuals to buy the stock and investors have until Tuesday to decide if they want in or not.

The company encompasses insurers Direct Line, Churchill and Privilege, plus the Green Flag car breakdown business.

Spanner in the works: An investigation into insurers could hit Direct Line¿s shares
RBS is being forced to sell the company by the European Union, which has demanded the sale as the price for RBS’s State bailout during the financial crisis. RBS must sell half the business by the end of 2013 and must have sold the rest by the end of 2014.

This is the first factor that might make a potential investor cautious, as future forced sales could drive down the share price. In this first sale, RBS is offering between 25 per cent and 33 per cent of the stock. Shares will be priced at between 160p and 195p, valuing the group at between £2.4 billion and £2.9 billion.
More...Should you invest in Direct Line? Will it be a dividend goldmine or are car insurers heading for a crash?

The price will be determined by demand and will be set in four days, but the mid-point in the range is 177p.

Direct Line Group made a profit of £106 million in the first half of 2012. This means that at 177p a share, the group would be valued at about ten times past earnings and about nine times forecast earnings. This puts it in the same range as rival insurers such as RSA, owner of the More Than brand.

Direct Line’s plan is to pay between 50 per cent and 60 per cent of annual profits in dividends. This means that based on the 177p mid-price, a dividend of about 10p gives a yield of about six per cent. This is good compared with most of the stock market, but is not exceptional for an insurer.

Finally, what about the value of the group compared with its real assets – the cash and investments it holds?

After paying owner RBS a £200 million dividend last month, Direct Line Group’s net tangible assets are worth about £2.3 billion, or 155p per share.

So the mid-range of the offer price amounts to a modest premium to the value of its net assets. In this regard it looks priced quite cheaply. In comparison, RSA is valued at about 1.7 times its net tangible assets. So on balance Direct Line looks to be valued at a slight discount to its peers. But if demand for the shares is high and they are priced near the top end of the range, that discount will be far less.

As for its prospects, Direct Line becomes even harder to judge. It has some well-recognised and successful brands in Direct Line and Churchill. The red phone and the nodding dog are burned into the nation’s minds.

There is clearly huge value in these brands and their market shares. However, motor insurance in particular is a cut-throat market where price competition is fierce. There are no obvious ways in which Direct Line or Churchill can grow fast. In fact, as mature businesses in a crowded sector, they must market themselves heavily just to maintain their share.

Finally there is the Competition Commission, which has just begun an investigation into the motor insurance industry.

This is likely to look into every nook and cranny of the industry and focus on issues such as referral fees, where insurers sell accident victim details to third parties like injury lawyers, and the prices charged for repairs and courtesy vehicles.

About 40 per cent of Direct Line’s business is in motor insurance. It faces no unique threat from the investigation but if it leads to a big overhaul of the way car cover is priced, it could affect valuations across the sector.
Midas verdict: Just because this is a flotation and a chance to be among the first to own shares in a newly listed company, do not rush into buying Direct Line shares.

On balance the valuation is on the modest side, as one should expect from an initial public offering, but if shares are priced at the higher end of the range, then that discount will be reduced. Also there are risks to the whole sector posed by the Competition Commission inquiry.

Finally there is the overhang of shares. Even after this sale, two-thirds of the company will come to market in the coming two years. It is hard to see that as a positive for the price. For the time being, these are shares to avoid.


Read more: http://www.dailymail.co.uk/money/investing/article-2213890/MIDAS-Direct-Line-float-looks-tempting-steer-clear.html#ixzz28bKbwcFc
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Anyone applied for any then?

Wait and buy them in the after market!

Golden cross powered by DLG.

which means what skinney, on up or come crashing down? as for my purchase of dlg, it appears i didn't hit the right button, in hind sight maybe it was fate. no great loss, but in profit now with rbs.,.

Its normally a bullish sign. But wtf do I know.

more than me and thats a fact lol.,. cheers skinny

Santander $2.7 billion deal for RBS UK branches collapses

LONDON | Sat Oct 13, 2012 1:37am BST

(Reuters) - Spain's Santander pulled out of its 1.65 billion pound (US$2.65 billion) deal to buy 316 UK branches from Royal Bank of Scotland late on Friday, dealing a sharp blow to the state-backed British bank.

More than two years after the deal was struck, it collapsed because the process of carving out the business proved more complex and difficult than had been expected. Santander said it was unwilling to again extend the deadline when it became clear that it would not be completed this year.

RBS, 83 percent owned by the British taxpayer, said it would restart the sale process, which had been ordered by European authorities as a cost for Britain's rescue of RBS in 2008.

Sir Richard Branson set to make a move on 316 RBS branches

Virgin Money is poised to work on a bid for the 316-branch Royal Bank of Scotland division after the collapse of the deal to sell it to Santander.

The Sir Richard Branson-backed bank, which took control of previously nationalised Northern Rock on January 1, is ready to look at the balance sheet of the unit with a view to beginning formal due diligence once the sales process is restarted.

A source close to Virgin Money indicated that it had been “very keen” on the RBS unit when it was first put up for sale in 2010, and would be seriously considering the opportunity to rebid.

Despite Virgin Money interest in the branches, RBS may prefer to keep the branches.

either way, reckon sp going to dive tomorrow.....

I think it will not move much by the close.

Note: Virgin Trains Secures West Coast Extension

No, think i was wrong looks quite steady atm.,.

Not much move as expected. If holds, it will jump by the end of the week.

which way?? and why.,.

There is always a limit to everything, even stock manipulation thorough computer glitches cannot destroy the world.

The branches worth much more than the price offered. RBS holders should be happy, IMO.

Have a look under the paragraph "What now?"

Treasury's dilemma over RBS break-up

As expected. Higher than close before the news.

RBS are considering suing BNC.