Northern Rock ist zu riskant für jeden Investor,der nicht vorbereitet ist auf grosse Verluste .....schrieb die Financial Times gestern By Sharlene Goff and Daniel Thomas
Published: September 28 2007 17:18 | Last updated: September 28 2007 17:18
Stockbrokers are advising shareholders in Northern Rock to sell out ahead of a bid, unless they can stomach significantly more volatility in the share price.Brokers who saw high volumes of private investors pile into Northern Rock last week believe the stock is too risky for any investor who is not prepared for large losses.
“Even at today’s prices there are better long-term opportunities elsewhere in the banking sector,” said Henk Potts, equity strategist at Barclays Wealth. “There is no guarantee that the company will even be bought at market price, which makes any investment in the stock incredibly speculative.”
Jeremy Batstone-Carr, head of private client research at Charles Stanley, which has a hold recommendation on the stock, said investors who had gone into the stock recently, or who were thinking of buying, are making small punts with money they can afford to lose. “If you have the stomach for it then by all means, but we don’t want to encourage people to invest in something when the foundations are so uncertain,” he said.
Northern Rock shares, which have lost 75 per cent of their value this month, were buoyed this week by speculation that a bidder would emerge. Having rallied from a low of 159.8p on Tuesday, the shares were priced at 184.5p on Friday morning. But stockbrokers warn there could be further falls. Investors are still going short on the stock, although not to the extent that they were last week. According to Data Explorers, 15 per cent of Northern Rock’s market capitalisation had been borrowed to “short” the stock on Thursday in the hope that share prices would again fall.
Graham Spooner, adviser at The Share Centre, said: “There could still be very negative news for shareholders. The situation is changing on a daily basis and analysts are finding it hard to value the company.”
Most analysts remain negative on Northern Rock. Sandy Chen, financials analyst at Panmure Gordon, recommends selling: given the uncertainty, the takeover price could be anywhere between 1p and £4, he said.Collins Stewart has also reiterated its sell recommendation on Northern Rock with a 130p target. The broker said it saw risks in longer-term revenues, regardless of liquidity issues.
Chen added that any bidder would only be looking to gain Northern Rock’s loan book. “To make matters worse, every £1 of customer deposits that are withdrawn probably needs to be replaced with Bank of England funding at punitive rates,” he said.
Graham Neale, head of equities at Killik & Co, said: “A holding in Northern Rock is essentially an option on a highly-geared mortgage book. We would recommend investors switch Northern Rock holdings into Barclays, which is a lower risk holding with better upside.”
But for investors who have shares from the demutual-isation of Northern Rock, the message is different.
Spooner said: “If they haven’t sold by now, it might be worth holding on.”
Hoodless Brennan, which last week reported a surge in private clients buying into Northern Rock, said buying and selling levels had evened out in the past days.
Most institutional investors have already sold. Data Explorers said institutions now own just 15 per cent of the shares, down from 33 per cent last week.
Will Duff Gordon, managing director of Data Explorers, said: “The people who own Northern Rock are now overwhelmingly retail investors, and can only be pitied. It looks like the market thinks any bid would be £2 or under, which would be terrible for shareholders.”http://www.ft.com/cms/s/0/e3c5c70e-6dbc-11dc-b8ab-0000779fd2ac.html |
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Jose Maria Ruiz-Mateos
