Contrasting fortunes this morning for two newsworthy mortgage banks. Alliance & Leicester is heading lower again but Northern Rock - against all the apparent dictates of common sense - has jumped 29%.
Investors are still concerned about Alliance, despite its regular comments dismissing worries about its funding situation. A trading statement is due this week, and details of proposed write-downs of some of its toxic loans are keenly awaited. A&L is now down 3.5%.
As for Northern Rock, it stands at 110.8p compared to the plan by preferred bidder Virgin for new shares to be issued at 25p each. Earlier its shares had fallen to around 70p.
David Buik at spread betters Cantor Index said: "There is little doubt that many people believe that Northern Rock's shares should have been suspended weeks ago. But the fact remains they have not and they have been bobbing around from a low of 59p to a recent high of 104p. With Virgin Money now the preferred bidder at about 25p a share, one might well have expected the share price to fall substantially from its closing level of 86p on Friday.
"However there are a number of technical issues to be mindful of. Firstly it is becoming increasingly difficult to short the stock, as borrowing Northern Rock stock to do so is proving very difficult. Consequently those who wish to close their bear positions out are being technically thwarted at inflated prices.
"Also it seems likely that [substantial shareholders] RAB Capital and SRM would prefer to do a deal with Luqman Arnold's Olivant. Perhaps Virgin Money's parsimonious bid will encourage others to improve on it."
Still on the credit crunch, HSBC was steady at 827p as it said it would restructure its structured investment vehicles to support them in the face of continuing difficult conditions. It expects to provide $35bn over the next 12 months, and will take them back onto its balance sheet.
Overall, the FTSE 100 was 27.3 points higher this morning, helped by early signs that the key US shopping weekend just gone has got off to a reasonable start. US futures indicated a positive opening on Wall Street this afternoon.
Miners were stronger as Rio Tinto, up 3%, gave an upbeat outlook and rebuffed BHP Billiton's offer.
Among the UK fallers, pubs group Mitchells & Butler fell 19.5p to 621.5p as rival Punch denied reports it was in talks about a merger between the two.
And shareholders in waste management group Biffa seem to be suffering an unaccustomed amount of volatility. After Friday's news that private equity group's Montagu and HgCapital made an approach in September, the company's shares soared nearly 30% at 325p. Today they fell back 10% to 291.75p as Biffa said it had rejected the approach and had not held any further discussions since September.
