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Why have investors been buying NatWest shares recently?

Why have investors been buying NatWest shares recently?
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On 7 October, state-backed bank NatWest Group pleaded guilty to charges of failing to comply with anti-money laundering rules. In a court hearing, NatWest accepted that it had failed to monitor and prevent around £365 million of money laundering by one of its customers. It now faces a fine of up to £340 million. It was expected that such news would negatively affect investors’ attitudes towards NatWest and its shares.

Yet, this has not been the case. New data from investment platform Fineco, shows that NatWest was actually the most traded company on the platform last week.

Why have investors been buying NatWest shares?

According to the data from Fineco, NatWest was the top mover globally this week, trading at 74% volume buy and 26% sell. Investors have seemingly shrugged off the company’s recent legal problems and remain upbeat about its future prospects.

And there’s a good reason for that: the price of NatWest shares has more than doubled over the last 12 months.

Furthermore, NatWest reported a pre-tax profit of £2.5 billion for the six months to June, far exceeding the £1.8 billion predicted by analysts and reversing a loss of £770 million in the previous year. So, even though the company faces a potentially massive fine, it pales in comparison to its recent profits, and so the impact is likely to be minimal.

With the UK currently experiencing inflationary pressures, there is a likelihood that the Bank of England (BoE) will raise interest rates. If that happens, this could benefit the banking industry and its stakeholders such as NatWest. That’s because higher interest rates translate to higher profits on loans and financial transactions.

Back in July, NatWest also announced that distributions to shareholders this year would be almost £3 billion, with at least £1 billion on the table over the next three years. NatWest also plans to buy back shares worth up to £750 million from its investors.

In a nutshell, despite recent legal problems, there is a lot to be optimistic about when it comes to NatWest.

What else have investors been trading?

Here are the ten global stocks with the most trading activity on Fineco:

Company

Volume buy

Volume sell

Natwest Group

74%

26%

DatChat

55%

45%

Legal and General

100%

ASML

53%

47%

Pantheon Resources

100%

ChemoCentryx

50%

50%

Alphabet-A

100%

Gazprom

66%

34%

Camber Energy

47%

53%

Callon Petroleum

50%

50%

 

Meanwhile, here are the top ten UK stocks:

Company

Volume buy

Volume sell

NatWest Group

74%

26%

Greggs

50%

50%

Cornish Metals

100%

Gulf Keystone Petroleum

57%

43%

BAE Systems

12%

88%

HSBC HLDG

28%

72%

Legal and General

74%

26%

Pantheon Resource

68%

32%

Coats Group

100%

Galliford Try

100%

 

How can you trade shares?

One of the easiest and often cheapest ways to trade shares is through an online share dealing platform. Once you’ve created your account, all you need is to fund it, search for the shares you want and the number you require, and then simply place your order.

If you don’t have one already, check out our comparison of some of the top-rated share dealing accounts in the UK.

You can also trade shares through a stocks and shares ISA. The main advantage of a stocks and shares ISA is tax efficiency. When you trade shares through a stocks and shares ISA, your profits are not subject to income tax or capital gains tax, meaning that you get to keep more of your money.

Just remember to do your own research before you invest in any company. If you are not sure whether an investment is suitable for your circumstances, seek professional advice.

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