‘Sun Worldwide’ - World Finance- (Bank Caution Proven Correct)…

May 13, 2009 - PRLog -- “Sun Worldwide”, the Asian-based asset management firm who vehemently discouraged clients from buying stocks in UK banks, appear to have been proven correct in their assertions that the sector was heading for further distress.

Sources close to “Sun Worldwide” cited the fact that many commentators had advised investors to buy into the LloydsTSB/HBOS share issue reasoning that it was likely to be one of only a few beneficiaries once the UK mortgage market regained its footing.

“Sun Worldwide” advised its clients to ignore what it called “irresponsible ramping” saying that the bank would have to write down vast sums to cover HBOS’s poor quality business loans. The stock plunged from its price of 210p at that time to as low as 39p in January 2009 and, although they have recovered to 100p in recent weeks, the firm believes it is just a matter of time before they plumb the depths once again.

One of the “Sun Worldwide” sources suggested that the banks are still mired in uncertainty because markets are unclear as to how the Bank of England will respond if interest rates have to rise sharply in the not-too-distant future.

This, the firm fears, will mean that even more borrowers will be forced into difficulty thereby adversely affecting the banks’ earnings.