Flotation Frenzy: Britain's Building Societies Battle for Survival

Britain's former building societies are facing intense competition from new players in the financial sector, leading to a painful squeeze on margins for established players. Despite attempts to differentiate themselves, building societies such as Bradford & Bingley (B&B) are struggling to attract investors and maintain market value. In a bid to raise capital, B&B will float on the London stock market, but analysts warn that investors may not see it as a bargain at between 250p and 280p per share. Meanwhile, DaimlerChrysler is embroiled in a lawsuit alleging fraud, and BT's share price continues to plummet due to a series of negative announcements.

Key Takeaways:

• Bradford & Bingley's attempt to float on the London stock market has been met with skepticism, with analysts warning that investors may not see it as a bargain at between 250p and 280p per share.
• The building society's return on equity at 13% is lower than the sector average, and its 80% dependence on mortgage-related business has poor growth prospects.
• DaimlerChrysler is facing a lawsuit alleging fraud, which may further depress the share price and distract management.
• BT is experiencing a steady drip of bad news, including the departure of head of technology Peter Cochrane, scrutiny of its internet pricing strategy, and a hefty premium on its forthcoming $7bn bond due to its relatively weak credit rating.
• The tech meltdown has contributed to the decline of BT's share price, which fell as low as 553p before closing the week at 603p.

Statistics:

• The market value of Britain's former building societies has been battered by concern about competition from new players.
• B&B's return on equity is 13%, lower than the sector average.
• 80% of B&B's business will be related to mortgages, which have poor growth prospects.
• BT's share price fell as low as 553p on Thursday, a level not seen for three years.
• BT's share price closed the week at 603p, down from £15 in January.
• The hefty premium on BT's forthcoming $7bn bond is due to its relatively weak credit rating.

Sources:

• "Bradford & Bingley building society to float on the London stock market. Shares a bargain at between 250p and 280p." - The unnamed writer
• "DaimlerChrysler What a preposterous turn of events at DaimlerChrysler, the car company born of the German-American merger of 1998..." - The unnamed writer
• "BT There seems no end to the steady drip of bad news from BT, which saw its share price fall as low as 553p on Thursday, a level not seen for three years." - The unnamed writer