FTSE 100 financials are being hammered today by at least four market bothering themes:
- Prudential’s massive takeover of AIG’s Asian Life unit (and the rights issue it will require)
- HSBC missing profit forecasts
- Worries over a UK hung parliament
- On-going Greek debt /domino concerns
Prudential is down 11%, and the likes of HSBC and Lloyds have been down as much as 5%.
Two top-of-head thoughts:
- Could fund managers be selling down the sector in anticipation of the Prudential cash call?
- All these companies hold a lot of UK gilts – this hung parliament fear could yet become a crisis.
It feels like an opportunity, yet I’m dithering between opportunistic purchases of Lloyds or Aviva. (Update: Swayed by the 6%+ yield I bought AV. for my income-based ISA).
(Disclosure: Long HSBC and Aviva)
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If we’re playing short term shenanigans on stock tickler, don’t forget the obvious… if PRU is buying AIGs biz it ain’t going to buy Aviva… takes a bit of bid out of the price.