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LLOYDS is going to FLY

lse:lloy

#1522

There is every sign that the Johnson government have now been shown the true figures of a no Deal Brexit and are back-pedalling as fast as they can.

However, that doesn’t mean to say they may not have backed themselves into a corner. The economy is in big trouble if a No Deal happens despite HMG addressing some of the more obvious long term issues, like the £0.5Bn p.a. lost from the R&D sector that the EU poured into the UK making it the biggest R&D centre of Europe. That’s just the Horizon 2020 money HMG have today promised to replace (never counted in the net ‘costs’ of being an EU member, by the way).

If the economy is in big trouble, then the local banks are in big trouble, and Brexit with a deal is just the start of a minimum of 5 years uncertainty.

The withdrawal of the UK from Horizon2020 has already seen many cutting edge job losses in the companies that are supposed to be ensuring the future of UK PLC. The new policy of increasing immigration to fill the jobs in such companies is also another sign of realisation dawning, but it is way too late for many already.

Brexit is a huge negative for LLOY for the foreseeable future, but none of us yet know if we’re looking at 5 years or 15 years of uncertainty. Nor can we calculate the loss to the economy of the UK falling from the G7 economies along with loss of international respect.

I’ve been astounded by the number of investors on these boards that have welcomed this situation as a price worth paying for Brexit. Still, I can accept that some people may hold such views. What I can’t understand are those who have those views and then invest in a UK-centric bank (or other business wholly reliant on the UK economy).

It seems like madness to me.

Just think, if Brexit were cancelled tomorrow LLOY would probably put on 50%. in a day, returning to the price it was the day before the referendum campaign plus some with the end of PPI in sight.

That’s certainly something for you to think about, @rossx48, perhaps some others too.


#1523

EADWIG
Thank you…but ….BREXIT is secondary to our interest in the everyday Lloyds value and return.
We see Lloyds as having covered all its bases…and even more by looking into the future.
Most of us here are humble investors; SICK of the never ending Hacks getting red faced over politics
UK. a place that for all our misgivings is still home
Salutations


#1524

Will I ever get an answer to " who is we " ?

I think J_W was correct in calling you a loon.

Can you even say whether you have a holding or position in LLOY ?

How about being open ?

soi


#1525

Probably Ross… and the voices he hears in his head.


#1526

He certainly has an individual and rather eccentric style. Still, all views are welcome.


#1527

I’ll just try and explain one more time.

The value of a retail bank is generally entirely dependant on the economy within which it operates. For LLOY that is now almost entirely the UK after its purposeful downsizing.

The health of UK economy is almost entirely dependant on BREXIT and its outcome., as you have repeatedly been told over the last almost 3.5 years.

Therefore the value of LLOY and the outcome of BREXIT are closely linked. Separating the two in your own mind is bizarre in my opinion.

As for LLOY having covered all bases. How can they have as not one single person can predict all the bases? IF LLOY are very, very lucky, they may find that they have wasted a load of cash covering bases they didn’t need to.

More likely, within weeks of a No Deal Brexit we’ll see bases that LLOY haven’t covered - like outstanding loans to companies that announce they are ceasing business. There will be some of those, as even the Johnson government now admits.

Personally I predict specific hits such as the above and a general recessionary background in which retail banks just do not thrive.


#1528

Looks like we have finally broken the 54p barrier and it now appears to be holding. I’m predicting (and I should be selling but I won’t) that there will be some profit taking around 15:30 today - possibly back below 52p. Thoughts?


#1529

Ter
They speak with forked tongue.
And possibly with a slight" squeeze" on their powder horn.
Salutations


#1530

Well it looks like LLOY is flying for now along with other banks and housebuilders. This is puzzling because these sectors would be vulnerable to Brexit and recessionary factors. Nonetheless, my portfolio has recovered to very close to its highest ever balance albeit with a little help from reinvested income.

Cheers,

Frog in a tree


#1531

Ter
And dancing with wolves that are galloping off in all directions.
Salutations


#1532

TER
Is it possible B & M.S are right in the 75.00 number?
Salutations.


#1533

Yes, but that has been largely priced in .

Now the government has clearly started to at least acknowledge some of the damage Brexit will do/has done and is promising to do something about with new policy changes every day, like replacing the EU’s massive funding of UK R&D (No idea where that money is coming from) and encouraging greater immigration (that will fund a lot of it).

It is like they have suddenly abandoned the Brexiteer rhetoric and started listening to the Remainers. The logical next step is to cancel Brexit - but that would be too sensible.

Even so, the markets look to have started to believe that No Deal is now off the table and therefore a lot of the potential damage, for which they have been allowing, might now be lessened.

This in turn means GBP has strengthened, which in turn means UK-centric companies are more favoured. This can be summed up by …

GBP = 1.245 USD and 1.12 Euro
FTSE 100 +0.4%
FTSE 250 +1.1%

… so - while still heading for disaster, the markets believe a lot of that is already priced in. Hence the recent revival over the last few days, coming from a low base. The market has a very short term memory these days though …

Also, I’m afraid that a lot of these U-turns will simply turn out to be quid pro quos with ‘rebel’ Tories (who are simply living up to their duty to protect ALL of their constituents so far as possible), to get them back on board. Many of the promises that require funding may never come to anything.

The real test for me is if they will eventually include freedom of movement within a Brexit deal. I think they have to - how else do you solve the Irish problem?

That would be a Norway style solution. We can pay the EU for market access AND re-build a new whaling fleet to provide employment for the millions of disaffected Brexit Party voters. The UK would also get the right to pursue new, individual trade deals so it can trumpet ‘taking back control’.

Perhaps not. Anyway, that is my take on why the UK-centric stocks are doing better. Also, the sacking of Adam Bolton just possibly underlines that Trump has recognised that he can’t win any more votes by going even further right. Johnson and friends will take note as they are using his play book.


#1534

DIngbat
latest
Market Cap 42.45 to 44,88
Salutations


#1535

No

They are wrong

soi


#1536

Another view (8 days old) … same result. You can’t separate LLOY and Brexit. This article also lists a number of risks associated with Labour policy. Undeniably a Corbyn government is more likely due to the Brexit referendum result.

(Bloomberg Opinion) – Lloyds Banking Group Plc is within touching distance of putting behind it a scandal that has cost a breathtaking 21.8 billion pounds ($27 billion). But any celebration would be premature: The lender is, in effect, one of the biggest bets on Brexit Britain.

On Monday, Lloyds said it would suspend a share buyback after setting aside an additional 1.8 billion pounds to compensate customers who were sold payment protection insurance they didn’t need or want.

The end of the costliest scandal in the history of the British banking industry is unlikely to prove a turning point. Banks still face the most uncertain political situation in a generation, and there’s little their managers can do to prepare for what may come next: a no-deal Brexit or an election victory by Jeremy Corbyn’s Labour party.

Analysts at Citigroup Inc. estimate that in the event of a no-deal Brexit, U.K. loan growth would drop in line with a likely economic contraction, cutting British bank earnings by as much as 9%. A possible decline in interest rates would also eat into profit and the big unknown — the pace at which loan losses would build up — would further erode income.

Add to the uncertainty a potential election and Labour victory. In addition to policies that would affect the economy broadly — handing 10% of companies to employees, increases in corporate taxes — the opposition party also envisions changing the law to stop banks from shuttering branches. Cutting costs by closing outlets has been at the heart of Lloyds’s restructuring under Chief Executive Officer Antonio Horta-Osorio.

To be sure, British Prime Minister Boris Johnson may yet clinch an agreement with the European Union on Brexit, and a Labour election victory may not materialize.

Yet the risks to Lloyds appear to be near acute: U.K. consumer and commercial lending accounts for more than three quarters of its assets, and its insurance and wealth businesses are also largely domestic.

Since the Brexit referendum, Lloyds’ shares have dropped about 31%, under-performing both the FTSE-100 Index — which is up 15% — and the FTSE 350 Banks Index.

Without a crystal ball, quantifying the cost of Brexit to the country remains tricky at best. The Bank of England now expects the peak-to-trough hit to GDP to be about 5.5%.

Many see value in Lloyds — 90% of analysts recommend buying or holding the stock. At around 13% return on equity and a price to book of 0.8 times it isn’t a commanding valuation.


#1537

LLOY down 1.6 % today

Flying indeed.

soi


#1538

Surely, I was not the only one that’s was not getting excited with last weeks rise to 55p ?

Just another Dead Cat Bounce

Nothing to see here, until we depart Europe or another referendum / cancel leaving

OK off now to enjoy living the dream, driving around the countryside with the better half… Mobile Phones etc are Banned …

I am on my time now no more wasting my life looking at share prices like I did when working :slight_smile:

HAPPY DAYS


#1539

The Future.
Very well presented Fellas.
However…WE were discussing BREXIT and its resolution in regard to the B.J. direction
AND …. It’s only one way with him… " O U T "
AND ….As Brits we will march on with a stiff upper lip.
AND ….Lloyds will make a fortune selling travel insurance ….tongue in cheek
Salutations.


#1540

Regardless

Happy days ……Yes
Driving around the country with the better half…You have it all.
A time of relaxation … when mobile phones etc are banned.
How about reading …in a quiet lounge perchance for relaxation ?.. if so ….and you can find it…a book I wrote many long years ago ( in another world )" THE SUPERLIST…I spy alone" You may enjoy it.
Yes ….our values do change
Salutations


#1541

rossx48

I been around a while with shares, sometimes you just got to enjoy the ride and wait for the good times to roll back…

I am happy to enjoy life and pick up the dividends … no pressure to sell any shares today

THANK GOD