atans1

Can local bank stocks fall by 37%? (cont’d)

In Banks, Economy, Reits on 05/08/2020 at 4:10 am

Further to Can local bank stocks fall by 37%? And other investment tales, here’s another good reason to think that bank stocks can really tank.

In the UK, where banks are usually generous dividend payers, after the authorities told banks to stop paying dividends until next yr, the banks decided to compete on seeing who could %wise have the largest loan loss provisions. HSBC (where I’ve owned shares since the early 1980s) won this show of macho, increasing provisions by a third more than expected. Shares fell by another 4% on Monday and 3% yesterday. The share price is near its 1996 lows and have already fallen below the late noughties low.

What I’m predicting is that our banks will be increasing their loan provisions beyond analysts’ expectations. They will be reporting their latest results soon.

So it’s possible that our banks’ share prices can fall by 37%.

Last chance to sell as shares recovered their Monday losses yesterday.

Good luck, yield chasers who tot banks were safe. Why not try industrial reits? They’ve held up pretty well. Buy the second liners (not the GLCs) so that I can smile when I look at their prices.

  1. Too bad, my “reits” are American Tower, Digital Realty Trust & Americold Realty Trust.

    Although I don’t put too much into high yielding assets in US coz of WHT.

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