Financial shares enjoyed healthy gains last week following a welcome injection of confidence into the US markets as a result of JP Morgan Chase’s revised $10 a share offer for Bear Stearns.
HBOS rebounded strongly following the recent false rumours surrounding its liquidity.
To counteract the rumours and bolster confidence in the lending giant, a raft of HBOS’ executive directors and top senior managers purchased around £6m of shares in the firm, mostly at 446.25p.
This was a good move. Multiple director purchases like this encourage investors and often signal good buying opportunities.
The banks that suffered the most significant declines in recent times were the ones that performed the best last week.
HSBC’s gains were restricted, although incredibly its shares are now close to their level at the start of the year.
Prudential’s shares rose amid vague rumours of a takeover by China Life.
Given the strength of the group’s Asian franchises, it’s seen as an attractive target.
John Goodall is a private client research analyst at stock broker WH Ireland.