EGR Broking recommends selling shares in Britain’s part-nationalised bank Lloyds, which have surged some 45 percent since the start of 2013, in order to bank profits on that rally before Lloyds’ interim results at the start of next month, before then buying back the stock at a cheaper price.
Lloyds is up by 1.1 percent at 69.53 pence in early session trading, but EGR Broking managing director Kyri Kangellaris expects the stock will struggle to make much more headway without first falling back.
“At this stage it is hard to see much more upside from the current price without a correction. There may be an opportunity to sell at current levels and then buy back at cheaper prices or buy other shares, and it is prudent to reduce exposure before August 1st, when the half-yearly results are announced, in case of any nasty surprises,” Kangellaris writes in a trading note.
The British government owns around 39 percent of Lloyds and 81 percent of rival Royal Bank of Scotland after bailing out both companies during the global financial crisis.
Lloyds shares had hit a 2-1/2 year high earlier this month as overseas investors stepped up their interest in buying part of the bank, with media reports suggesting some may want half the government’s stake.
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