A Virgin Trader

Following on from my last article on RBS, I had a chat with ‘the trader’ to get his opinion. As he is never without a word or two on these matters he suggests, the RBS’s rights issue is an attempt to avoid the government increasing its holding from 70% to 85% by way of a fee for putting £325bn of toxic assets into the bad bank. The rights issue has caused a flutter in the dovecotes (bulletin boards) as no one really seems to understand its potential impact.

Look at it this way: the government has an interest in seeing RBS and its other banking waifs and strays prosper. That way they can not only be shot of the unwelcome lodgers on the governments balance sheet but, more importantly, the government wants to be in a position to get shot of them at a profit. Taking the toxic assets out of the equation already improves the picture and for a government that is more strapped for cash than a drunk without the taxi fare home on a wet night, they will take any measures they can to cash in as soon as possible – knowing the government that would be before the election if they had a snowball’s hope of meeting all the requirements by then.

You can always count on ‘the trader’ to be colourful.

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Tags: RBS, RBS rights issue, Royal Bank of Scotland

Has the summer winning streak come to an end for RBS shares? It looks as if the Royal Bank of Scotland are desperate to escape a tightening government grip, as rumours spread over a potential cash call by part-nationalised RBS to keep the taxpayer’s stake at 70%, and who can blame CEO Stephen Hester for trying.

According to the media this week the part-nationalised bank, which is 70% owned by the taxpayer, is testing the waters with key investors about potentially issuing preference shares or launching a rights issue of up to £4 billion. If there is enough support, it could all start happening in a couple of weeks.

The bulletin boards are all in a frenzy with no shortage of views on the subject, all pointing in different directions – don’t you just love them? They are a mixture of panic selling by some and just plain boasting by the – ‘look at me I made a mint from RBS and I am off to make a wad of cash in another stock’ bulletin board guru’s.

As a virgin trader, who did invest back in July at 43p, it is all a learning curve and nothing to panic about. Now is not the time to sell (famous last words?). I will just watch and wait, even perhaps enjoy a bit of  RBS bulletin board entertainment cause there certainly is a lot of it about.

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Tags: RBS, Royal Bank of Scotland