Share Dealing News Lloyds Shares Fall As Experts Predict Lack Of Rights Issue Support
Lloyds shares fall as experts predict lack of rights issue support
08 December 2009 / by Rebecca Sargent
Lloyds shares have continued to fall today, dropping a further five per cent to 53.2p, as experts predict weak support for the bank’s rights issue.
Research by The Motley Fool has revealed that there is likely to be weak support for the latest rights issue from Lloyds Banking Group.
According to a study by Fool.co.uk, almost two thirds of investors say they will buy into the rights issue, abut a fifth believe that it is a bad deal and will not be taking up their share rights.
Commenting, David Kuo, director at The Motley Fool said: “Just because the majority say yes to the rights issue doesn’t mean it’s the right thing to do.
“Over the last 10 years Lloyds shares are down by almost 90 per cent. An investment of £2,000 in 1999 would now have a capital value of around £200. It’s been a wealth of destruction of the highest order.
“Yet investors seem to be lining up to try their hand all over again. You could say it’s like spending £400 to upgrade your old clapped-out computer when you can buy a brand new one for £300.”
In fact, Mr Kuo claims that no one would be investing in Lloyds at the moment if it wasn’t for the rights issue: “As always, individuals with money to invest should look at all the shares in their portfolio, and see which looks the best value, before parting with any cash,” he said.
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