With no prospect of the political storm over his pay abating, Stephen Hester, chief executive at taxpayer-owned Royal Bank of Scotland, has agreed to give up his £1m bonus. Although this victory will inspire those fighting excessive pay and rewards for failure in the City, don't expect too many others to lay down their bonuses. Some City bosses might be swallowing hard as they ponder whether their own bonuses could attract similar publicity but it'll be a fleeting worry: they'll gain strength from the fact that they are employed in the private sector. With regard to RBS or any other bank shares, the whole bonus issue is irrelevant. What matters for bank share prices are the weak UK economy, the sentiment problem for all banks arising from the Eurozone crisis and capital adequacy and regulatory changes. Meanwhile, in the small cap arena, our companies editor Simon Thompson has noted some heavy director share buying in several of the undervalued companies that he follows and he explains why he thinks it's well worth following their lead. Chris Dillow, our economics writer, has been looking at the effect of momentum in gilts (following on from a recent piece on momentum in currencies) and finds that here too past gains can lead to future ones - but should you always jump aboard when gilt prices start rising? We've also got our usual round-up of press tips and The Trader gives his view on market movements.
Join our community of smart investors
