bank shares are nose diving when an interest increase looms ...

[CHATTYCHAT]

.. but I have to ask (again)- why is that? I can understand that company results move in the negative because of fluctuating interest bearing debt, but this does not apply equally to the banking sector? Or is the latest red arrow phenomenon ascribable to the tighter credit act?

[Preston]

SimonBP , if he has access to backoffice record ,will know why i cannot give you a direct answer. I will give you a clue.. 1. Research the terminology "stress test" which is applicable to finance or finance portfilio and that will give you more or less the answer you require? Hope this help.

[CHATTYCHAT]

Thank you. Found this as a start Stress Testing A simulation technique used on asset and liability portfolios to determine their reactions to different financial situations. Notes: Stress-testing is a useful method of determining how a portfolio will fare during a period of financial crisis. The Monte Carlo simulation is one of the most widely used methods of stress testing.

[Preston]

You are on the right track. Now think beyond the box. If you had R100000 and want to invest in Banks...Willyou pay the price of the share?

[Zanzibar]

Did a bit of reverse engineering last night. Found the period between May and August to be the worst for banking sector - widely speaking. It did not occur last year, but maby it was the exception to the rule. Regards