blender
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Post by blender on Mar 5, 2014 23:24:02 GMT
I have been monitoring, when possible, the number of unsold loan parts offer at par or a discount for a couple of weeks, aiming to take a measure near to mid day. This seems a good inverse proxy for the liquidity of our portfolios, or the ease with which we can turn our portfolios into cash without loss (other than the normal fees). Even over the two weeks of my records the number has nearly doubled from about 5000 on 18th Feb to 10000 yesterday, 4th March.
Through most of 2013 there were very few such parts, and they would often be large parts of £500+ or bought at a low rate, from 4%. Any decent part would heve been snapped up by Autobid or a manual purchaser. Through 2014 cash for the increased number of auctions has been short and the marginal and average rates on larger loans have been higher than in 2013. This has reduced the number of loan parts purchased on the secondary market, but also has increased the number of loan parts being offered without premium on the secondary market. There is no doubt that portfolios created in 2013 are much less liquid at present. The problem is getting worse, perhaps as lenders worry about liquidity and/or churn their portfolio for the better rates of new loans.
One of the strongest reasons for lending through FC, IMO, is the liquidity of portfolios which has been enjoyed for the rates offered. The worsening liquidity problem will only ease when new money comes into FC - much more is needed than from the member get member promotion. Comments and questions are now just starting to appear in another place. It would be comforting to hear what FC are doing about it.
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oldgrumpy
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Post by oldgrumpy on Mar 5, 2014 23:29:36 GMT
I'm selling off quite a lot of small parts (<£40) A risk band at 7.3%/7.4% currently and they are going like "hot cakes".
C band at 9.0% are selling very slowly. My early C- 11.5% sold quickly too.
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blender
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Post by blender on Mar 5, 2014 23:43:32 GMT
I did not wish to personalise it, but C- parts at 11.5% which are ex £60 and ex £40 are really not shifting at par.
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Post by davee39 on Mar 6, 2014 8:01:59 GMT
I did not wish to personalise it, but C- parts at 11.5% which are ex £60 and ex £40 are really not shifting at par. Unsurprising, considering A & B Loans are available at 10%+. I take the thread as being an invitation for FC to make a cashback offer or something similar, but why would they as long as loans are filling. Problems would only occur if Loan Traders failed to provide the bulk of last minute bids needed to fill the loans and create acceptable average rates. I think we will see a boost to promotional activity across the P2P market once the regulatory rules are clarified.
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blender
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Post by blender on Mar 6, 2014 8:34:39 GMT
I did not wish to personalise it, but C- parts at 11.5% which are ex £60 and ex £40 are really not shifting at par. Unsurprising, considering A & B Loans are available at 10%+. I take the thread as being an invitation for FC to make a cashback offer or something similar, but why would they as long as loans are filling. Problems would only occur if Loan Traders failed to provide the bulk of last minute bids needed to fill the loans and create acceptable average rates. I think we will see a boost to promotional activity across the P2P market once the regulatory rules are clarified. Autobid is blind to comparisons, it just has thresholds. No I am not thinking of cashback, which is just a temporary boost, because it seems that new lenders are needed to inject their savings. But they will not do that so readily if their money appears to be locked it. Liquidity is getting worse - the 10,000 loan parts at par or a discount is the serious selling end of 60,000 loan parts for sale. I hope you are right about the timing of an FC ad campaign aimed at current cash savers, but it is getting late for it. And it seems to me that FC are doing very little to raise awareness of their brand among current savers, and you would think the market leader would be doing that to consolidate and build on the position, if they wish to grow and float. The good rates currently offered should attract current savings, but people need to know about it and then act on it - and I do not see that. We all know that a profit is not a profit until it is taken, and that applies to our portfolios as well as FC's own venture capital.
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wysiati
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Post by wysiati on Mar 6, 2014 10:31:17 GMT
I take the thread as being an invitation for FC to make a cashback offer or something similar, but why would they as long as loans are filling. Problems would only occur if Loan Traders failed to provide the bulk of last minute bids needed to fill the loans and create acceptable average rates. I think we will see a boost to promotional activity across the P2P market once the regulatory rules are clarified. Loans are currently being filled well ahead of deadlines and an increasing number of the largest trading blocks do not even appear to participate at the end of auctions unless the top rates are in the 13-14+% range (a consequence of the rise in secondary market rates and the desire for better spreads). There is still good liquidity if you have attractive loan parts to sell (higher rates and not simply from auctions completed in the past 1-2 weeks in particular), e.g. some of the early acceptance loans with top rates at up to 15% were listed in the secondary market at 14%+ with premiums of 0.5-1%; fast forward 3 weeks and the premiums are up to 3% for the highest rate available.
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blender
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Post by blender on Mar 6, 2014 15:03:43 GMT
Loans are currently being filled well ahead of deadlines and an increasing number of the largest trading blocks do not even appear to participate at the end of auctions unless the top rates are in the 13-14+% range (a consequence of the rise in secondary market rates and the desire for better spreads). There is still good liquidity if you have attractive loan parts to sell (higher rates and not simply from auctions completed in the past 1-2 weeks in particular), e.g. some of the early acceptance loans with top rates at up to 15% were listed in the secondary market at 14%+ with premiums of 0.5-1%; fast forward 3 weeks and the premiums are up to 3% for the highest rate available. I was not suggesting that nothing was selling on the secondary market, just that there are 9,000 -10,000 loan parts unsold at par whereas last year for most of the time that figure was a hundred or so, mostly of poor stuff. We don't know how much is selling, but the canny purchaser can usually find a manual buyer for a good deal. And yes, flippers are being very selective - perhaps because it is hard to shift existing stock. I doubt that many people are unwise enough to be buying at +3%. Going back to statistics and principles - presumably FC would wish that portfolios created by autobid can be sold by autosale to new autobid lenders (this is why MBR only appies to new auctions). At present I would suggest that anyone who has bought a portfolio using autobid in 2013 (by November) will have some trouble in selling it now. The reason is simply that the FC campaign to get more borrowers has been successful while that to get more lender cash has not. Note the indecent haste with which the new BBB money was pushed forward.
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blender
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Post by blender on Mar 6, 2014 20:51:26 GMT
And now there is a single loan part offered at 3% discount which equals £58.50 (the absolute max is £60). Buyer rate 12.9%. You could not have seen that last year.
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mikeb
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Post by mikeb on Mar 6, 2014 21:05:42 GMT
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Post by bracknellboy on Mar 6, 2014 21:25:31 GMT
And now there is a single loan part offered at 3% discount which equals £58.50 (the absolute max is £60). Buyer rate 12.9%. You could not have seen that last year. well not for long by the looks of it. out of interest (sic) i thought I'd go and have a peek. You never know, I might have fancied it. Looks like either someone else did, or the listing was an error and withdrawn
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blender
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Post by blender on Mar 6, 2014 23:09:23 GMT
Yes it has gone. In December someone had purchased a £2000 loan part on a C- £60k (I think) loan at MBR or thereabouts, for 60 months. Average rate for the loan turned out to be 12.8%. A 3% discount took the loan part back up to 12.9% buyer rate. Autobid will not purchase £1900+ loan parts and so the 3% discount was probably the only way of shifting it quickly. Not a mistake for 3% mark up, which would be pointless, surely.
Previously I have seen a £35 discount, but £58.50 must have hurt, plus nearly £5 for FC. However, the interest to date would be around £50 so overall not much different from having the money in the bank.
It illustrates the sea change in the comparative value of C- loans - a while back they were all I bought and now they are the band I will not buy and which I try to sell. Next month maybe a different market landscape.
Bracknell boy, why you have no little male symbol? Is you an hermaphrodite? Only one girl me noticed on this FC board. Had hopes about old grumpy with those bananas, but it seems no.
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Post by bracknellboy on Mar 7, 2014 8:58:47 GMT
Bracknell boy, why you have no little male symbol? Is you an hermaphrodite? Only one girl me noticed on this FC board. Had hopes about old grumpy with those bananas, but it seems no. You are assuming that all who have declared their gender have done so truthfully. And indeed that any gender implied by their moniker is accurate, and not in fact a bluff. Last time I checked, I certainly did fall into one of two distinct gender types. I may just be choosing not to display which.
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Post by GSV3MIaC on Mar 7, 2014 10:08:38 GMT
Isn't BracknellBOY a bit of a hint?!
Oh look, now you've made me a full member. (nudge nudge, wink wink ..)
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Post by bracknellboy on Mar 7, 2014 10:37:07 GMT
Oh look, now you've made me a full member. (nudge nudge, wink wink ..) Congratulations ! I hope it hasn't been too long a time since you last had that status. But is it ?
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blender
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Post by blender on Mar 7, 2014 13:50:32 GMT
'He' always wears a baseball cap, which is also a clue. But come to think of it my wings are falsies so my avatar is not 100% truthful. And that jumper is in the wash at present.
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