THE TIPSTER NEW SHARES PLACING LIFTS SAINSBURY
SUPERMARKET chain Sainsbury’s had been doing well in the first months of 2009 despite consumers tightening their belts, and its share price reached a high of 347.25p in the middle of May. But its share price then slipped to around 309p and the stock has been trading broadly sideways since then.
However, the announcement of a £445m capital raising via a placing of new shares and convertible bonds to try to close the gap on rival Tesco has seen a glut of buys from spread betters. On Friday, its share price jumped from 309p to 312p in early trading. ShortsandLongs.com has a rolling Sainsbury’s spread of 311.6p-312.6p.
In the banking sector, Barclays has been the stand out performer with the high-street bank’s share price rising from below the 50p mark in January to above 300p last month. However, spread betters have been rushing to short Barclays on the belief that the highs have been reached for the time being. Spreadex has a September-based Barclays spread of 289.7p-291.8p.
WITHERING SHOOTS
With US earnings season upon us, the American banks are going to be back in the spotlight when Citigroup and Bank of America-Merrill Lynch deliver their second quarter earnings.
With green shoots seemingly withering, rising US unemployment and US business suffering, good results could encourage investors back into the markets, while bad numbers could send even more running for the hills. CMC Markets is quoting a spread of $2.64-2.71 for Citi and $11.91-11.98 for Bank of America.
And after the surprising announcement by the Bank of England last week that it will not extend quantitative easing and keep interest rates on hold, sterling will be in the spotlight, as traders try to anticipate the central bank’s next moves to counteract the financial crisis.
The decision lifted sterling after its recent losses above the key support level of 1.6000 as markets retraced their earlier moves in anticipation of a further expansion. Capital Spreads quotes a spot price for sterling-dollar of 1.6247-1.6250.