World Cup 2010 Insurance

Posted in Banking & Insurance, Power & Money

I have talked here before about Insurance that organisations take out on their business activities such as ‘locking-in’ prices to cover themselves against fluctuations in demand and supply. After recently reading an article on the BBC about World Cup Insurance, something caught my eye.

It was when a Lloyds TSB Spokeswoman said this about possible cover that they may have:

A Lloyd’s spokeswoman said these indirect implications could range from retailers offering free goods if a particular team won the Cup to broadcasting problems caused by delayed matches. (http://news.bbc.co.uk/1/hi/business/10240566.stm)

What interested me was the Insurance undertaken by retailers to cover them against giving away free goods/services if particular teams win the World Cup. Now it’s not surprising that there’s some sort of insurance for this however it’s when companies advertise on television “We’ll give you your money back if England Wins the World Cup” – and claims like these… on Sat Nav products if I’m not mistaken?  – You’d think companies are doing this to support their country whilst increasing the demand for their products but really they’re almost betting that they don’t win…. and if they did, they have ‘Insurance’ to cover themselves. It just made grin and thought you’d all  be interested.

Breaking Free from Toxic Asset Scheme

Posted in Banking & Insurance

Breaking Free from Toxic Asset Scheme

Royal Bank of Scotland

I have just been reading the Financial Times and there’s an interesting piece on RBS and Lloyds. It says that RBS are making a last minute deal to break free from the toxic asset scheme.

It also says that the bank won’t have to pay the £17.5bn fee, however they have to sell off some of the following areas.

• Insurance Arm – Includes brands such as Direct Line, Churchill, Green Flag.
• 300 RBS Branded Branches in England and Wales.

Now what effect will these large sell offs have on the Business and Its share price?

-          Now I’m no expert but I think it’s going to be a tricky one to try and guess. On one hand the selling of these divisions would generate large amounts of capital for the bank and therefore will balance their books and help to improve the bank’s situation, but on the other hand they will be losing big brands and so the company will be worth less?

The Share Price is also a big part of the equation, the bank has done a massive rights issue (increasing supply of shares in circulation) as it is which along with bad debt has been the reason for the fall in share price.  Now if the big brands are sold off, the company will be worth less and so will the share price fall further?
- But the argument on the other side is that they will have generated large amounts of capital from the sale of the bands.

I think it’s going to depend on how well the Bank is able to invest and use that capital to generate a return from it. Do you have faith? – I think that value will return to the Bank in many years to come and so this will be an investment for the very very long-run.

Lloyds TSB

Lloyds are looking at selling the Scotland arm of the business as well as Cheltenham and Gloucester.

They are also likely to be able to break from the Government scheme if they are able to raise enough capital to help balance their books.

They’re looking at raising the capital from a number of areas including the biggest ever rights issue!

So perhaps Lloyds is in a better position than RBS but who can tell until the divisions get valued and estimates get made.

Lloyds TSB – Second Rights Issue

Posted in Banking & Insurance

It will be the second time this year if the company has the go ahead to do another rights issue.

For those of you who don’t know, a rights issue is where a company will issue more shares into the market in order to raise more capital. In this case, Lloyds TSB needs to raise a substantial amount of money if it’s to opt out of the Bad Debt Scheme. It needs the money to pay a fee as well as neededing capital to improve it’s accounting books.

My Stance on this?

Now I’m very small when it comes to dealing in shares, I have lost money in cases and have earned money in other areas. Now when I heard about the potential rights issue I thought it’s my turn to get in on this. So I have purchased 634 Lloyds TSB shares so that when the time comes I’m going to be offered the new shares.

I think that in the Long-run the company will do very well and although I feel that HBOS was rubbish at the time when it was brought by Lloyds, I think that the increase in Market Share the both Businesses have now joined will come good in years to come.

If I get the opportunity to free up some money from other shares, I’ll have a punt and put some more into Lloyds.

I’ll post my calculations and working soon….

Current Share Price: 80.06p

- Potential of going as low as high 70s tomorrow….

My Stock Portfolio

Posted in Banking & Insurance, Lifestyle, Morrisons PLC, Speedy Hire PLC, Tesco PLC

My Stock Portfolio

Current Holding:

Lloyds TSB – LLOY
Provexis – PXS
Royal Bank of Scotland – RBS
Speedy Hire PLC – SDY

Ones to Watch:
Lloyds TSB – Possible Rights Issue?
ITV PLC – ITV
Morrisons – MRW
London Town – LTW
SAR – Sareum Holdings
Be very careful with the likes of PXS, LTW, RGM, RRR, possible big money to be lost with those… you need to do your reseearch and sit tight. You maybe lucky enough to day trade these but you need the funds and large quantities to be able to do so.

Speedy are good for the long run for smaller holdings or medium for the short-term providing you have the quantity to do so. I think the real winners are the Footsie 100, especially banks, they twist figures all the time, one minute at a loss, next minute making millions? -

Footsie 100 are likely to see large £1-3 + gains over the next couple of years, bloody good if you have the funds to buy in now.

Tesco is yet to make a come back too….