HBOS lost 11 per cent of its market value on Wednesday following the spreading of malicious rumours. Rumours had been falsely circulated that the lender was in trouble and had sought emergency funding from the Bank of England. There had also been suggestions of an emergency rate cut meeting being held at the lender.
Such is the volatility of the current market, HBOS’ share price plummeted from 480p each to 398p at one stage, before recovering somewhat to 427p. It is believed whoever circulated the rumour made as much as £100 million from buying and selling shares . A heavy police investigation is now underway to find the criminal in question.
The lender, which has £42 billion of mortgage and bond assets, had only last week had a fundraising and been cleared by auditors and investment banks, making it a surprising target for the rumours.
Banking Sector Suffers from HBOS Rumours
Financial Services > e-banking > Banking news
Banking Sector Suffers from HBOS Rumours
Fri, 28 Mar 2008
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