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Property

Spanish construction rebuilds after market collapse

Property developer Olivier Crambade founded Therus Invest in Madrid in 2004 to build offices and retail space. For five years business went quite well, and Therus developed and sold more than €300m of properties. Then Spain’s economy imploded, taking property with it, and Mr Crambade spent six years tending to Dhamma Energy, a solar energy […]

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Currencies

Euro suffers worst month against the pound since financial crisis

Political risks are still all the rage in the currency markets. The euro has suffered its worst slump against the pound since 2009 in November, as investors hone in on a series of looming battles between eurosceptic populists and establishment parties at the ballot box. The single currency has shed 4.5 per cent against sterling […]

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Banks

RBS falls 2% after failing BoE stress test

Royal Bank of Scotland shares have slipped 2 per cent in early trading this morning, after the state-controlled lender emerged as the biggest loser in the Bank of England’s latest round of annual stress tests. The lender has now given regulators a plan to bulk up its capital levels by cutting costs and selling assets, […]

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Currencies

China capital curbs reflect buyer’s remorse over market reforms

Last year the reformist head of China’s central bank convinced his Communist party bosses to give market forces a bigger say in setting the renminbi’s daily “reference rate” against the US dollar. In return, Zhou Xiaochuan assured his more conservative party colleagues that the redback would finally secure coveted recognition as an official reserve currency […]

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Categorized | Equities

European bank stocks sliding


Posted on November 17, 2016

Bank stocks are suffering on an otherwise relatively subdued morning for European equity markets.

Royal Bank of Scotland started the morning second from bottom of the FTSE 100, falling as much as 2.5 per cent. Yesterday, James Leigh-Pemberton, head of the vehicle that looks after the UK government’s investments in taxpayer-backed banks, told a committee of MPs that RBS could be hit with a fine as high as $12bn from US authorities. RBS is under investigation by the US Department of Justice over the way it sold mortgage-backed securities in the run-up to the 2008 financial crisis.

The eurozone-wide Euro Stoxx Banks Index opened down 1.4 per cent with every constituent in the red, its worst day since the election.

At publication time:

  • RBS: -1.3 per cent, 205p
  • Lloyds Banking Group: -0.8 per cent, 60p
  • ABN Amro: -2.3 per cent, €20.42
  • Bank of Ireland: -2.8 per cent, €0.21
  • Banco Popular: -2.3 per cent, €0.87
  • Mediobanca: -1 per cent, €6.89

Financial stocks were some of the biggest beneficiaries in the immediate aftermath of Donald Trump’s election victory, encouraged by rising long-term bond yields that help increase margins for lenders.

Bond yields rose to multi-year highs in expectation of higher inflation caused by Donald Trump’s planned fiscal stimulus, but the sell-off has lost some of its momentum this week, with the Bank of Japan’s announcement that it will stick to its yield curve target helping to push yields back down again this morning.