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It is still hard to see the light at the end of the tunnel of nationalisation as a sixth straight annual loss misses expectations and highlights the job that still remains. Further offloads will come later in the year, as the bank streamlines itself into a more traditional entity. One has to feel that the continued political fever created by bonus-paying at the investment bank has kept many investors away. Considering that since the beginning of 2013 RBS shares have barely moved, while Lloyds shares have gained more than 60%, you start to understand why the latter has been more popular with investors and traders alike. We do not expect this to change in the medium-term, as the government stake and the frustration that this brings to taxpayers continues to cloud any investment potential. On the other hand, Lloyds seems to have offered a much more clear cut opportunity, all be it perhaps from what may be perceived as a more conventional banking position.
If you thought that results from house builders have been impressive so far this week, Barratt Developments (+6%) and Redrow (+1%) weren’t told. Profit growth of 162% and 107% respectively, as well as positive dividend announcements, have helped to cap a great week for the sector which has been a real standout during the last year.
Our Households Goods and Home Construction Index, which mirrors the FTSE 350 equivalent, is up over 25% in the last 12 months.
US markets settled for a draw yesterday, and we can anticipate that they may follow the weakness set by Europe as we look to the open. The 1840 level is the call for the S&P 500, down five points, with January’s durable goods the data highlight today.