Bank stocks off to hot start this yearPosted by RJ and Makay on Feb 22, 2012 |
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Financial stocks are off to a hot start this year. The easing of the European debt crisis, improvement in the U.S. economy and the recent $25 billion settlement by large U. S. mortgage lenders has had a bullish effect on asset managers. During the seven-week period ended February 15, fund managers purchased about $3.2 billion net shares in banks, according to fund tracker EPFR Global.
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Recent public speculation about a possible split of the Hartford Financial Services Group (HFSG) into separate life and property-casualty (P/C) companies is raising questions about possible rating implications of such a move, Fitch Ratings said last week. Market perception of a possible split is largely unknown, though some investors assert that a split would improve the profitability of HFSG.
Investor perception that the U.S. housing market may be on the rebound is supporting renewed interest in once-toxic mortgage bonds that were at the center of the financial crisis, according to a recent Wall Street Journal article. Some distressed mortgage-backed bonds have registered double-digit percentage gains this year. The rally has brought investors back to a market sector that was ravaged between 2007 and 2009.
