According to a report in the Evening Standard private equity firms are gearing up to sell big chunks of their stock market investments if London's markets rally following a vote to remain in the EU.
For the Mr Average an explanation. There is a Lock-up periods to stop firms selling shares for a certain period. This period ended in April or May. The firms decided not to sell because of the uncertainty over the referendum.
Now Bankers decided to sell under so called Block trades which are big chunks of company shares to sell all at once for private equity firms if REMAIN wins on June 23.
Now this is a real threat not just scaremongering.
One Banker said: "A number of houses are looking to do big block trades. There will be two or three-week window after the referendum when everyone is calmer."
UK block trades have held back and had a low from January till May period at £10billion according to Dealogic figures. It is worse in Europe where block trades dropped by 82 per cent which resulted for the year ending May to £30billion.
and now heading for a crisis which also would effect the UK
Chinese's economy had a great impact on businesses around the world. The worst hit is the Chinese mining companies. The boom encouraged mining houses to invest further into new mines.
The world wide mining network could just about satisfy the huge demand and was rewarded by sky-high prices. As the slowdown kept creeping in there was no further market to expand to.
The overcapacity and rapidly fallen prices had a devastating impact on the mining industry. The sudden huge losses and diminishing capital created a massive debts and had a great backlash on banks which were beginning to be at a loss how to recuperate only some of the money.
Only recently there has been a light at the end of the dark tunnel only because of a reorganisation across the industry to level out the supply to the demand.
If Independent analysts reading the situation right it could create an upward trend in share prises. This will encourage companies to launch equity fund-raising. The temptation to reduce their debts will impose a dilemma to long-fund managers. They will have to make a very difficult decision.
In cases like that it is much easier for Hedge Fund where you can short the stock, close down and start again later when the situation is profitable without too much risk.
Well, as the saying goes "Time will tell".
