1/ The banks generally spend a shedload of money on man-hours researching the fundamentals of different stocks. Their withdrawl from their Standar LVR approved securities list means that they have enough concerns about a crucial aspect of the business so as not to lend against it in its own right."
Complete, unadulterated, rubbish !
The banks often cancel margin lending on stocks for the most frivolous of reasons. Not to mention several good ones.
At least two reason have nothing to do with the potential problems of the actual stock:
Reason 1: Bank has some arbitrary limit. It only wants to lend $50m against AIO ( for example ). Once the outstandng loans against AIO reach this level, then no more lending. This could actually be a good sign if it means big, smart, margin loan investors have been acquiring the stock ( assuming there is any such thing as a smart margin loan investor in 2008 )
Reason 2: Some insto customer/crony of the bank is seeking to acquire a large stake in AIO, the banks assist this by cutting margin lending to force margin loan customer shareholders to sell out.
AIO Price at posting:
92.9¢ Sentiment: Hold Disclosure: Held
