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Metro Bank shares slump as investors snub bond sale​​

Metro Bank shares have been hit by a failed bond sale yesterday. With shares 96% off their highs, will this sell-off continue?

Metro Bank scrap bond sale

Metro Bank shares have been on a one-way journey over the past 18 months, with the so-called ‘challenger bank’ losing 96% of its value over that time. With the bank struggling, it was certainly unwelcome to see an accounting blunder which had undervalued the company’s loan risks by almost £1 billion. Unfortunately good news doesn’t seem to be forthcoming, with the firm cancelling a bond sale yesterday amid a lack of demand. Monday’s initial announcement that they will be raising funds through the sale of debt came due to a need to meet EU regulatory requirements. However, despite offering an impressive 7.5% interest, the inability to undertake that bond sale signals a huge lack of confidence from the markets.

Metro Bank share price dives again and further falls are likely

Needless to say, we have seen the price tumble once again, building on the losses that have become synonymous with this stock of late. The weekly chart highlights a descending channel that remains in play, with the price seemingly heading towards the lower end of this pattern.

However, the four-hour chart provides greater clarity on yesterday’s decline, with the price slumping from a period of relative stability. The combination of the long-term and intraday picture is that we are likely to fall further from here, with a break through £3.18 required to bring some sense of calm back into play. Until then, this stock only seems to be heading in one direction.


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