Shares in tax payer-owned Royal Bank of Scotland powered up today after Bank of America/Merrill Lynch said the bank’s share price could double over the coming two years.

Analysts at Merrills said that earnings outlook for the banking group was significantly under estimated and subsequently raised its forecasts by 12 per cent for 2011 and six per cent for 2012.

As a result the broker raised its 12-month price target to 65.0 pence from 45.0 pence, triggering a climb in the group’s share price by 6.0 per cent to 48.7 pence.

Barclays is also benefiting from the banking sector’s feel good factor, which is showing no sign of ending any time soon.

Further to the gains made after JP Morgan’s stellar results earlier in the week, the bank made further gains boosted by the news of its rival RBS.

During the second hour of trading, this was only sufficient to sector the bronze position on the leaderboard, but a rise of 1.4 per cent to 388.4 pence was enough to keep the Griffin in the chasing pack.

While not troubling RBS for the top position, chip maker ARM Holdings shuffled into second spot (0940 hrs) following news that demand for Apple’s iPad had been far higher than the company had expected.

Accordingly, ARM Holdings immediately felt the benefit, rising 1.6 per cent to 243.9 pence.

Top ten trades
Thursday 15 April 2010 (until noon)
Source: TD Waterhouse

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Buy
1. Lloyds Banking Group, 13.9 per cent
2. Royal Bank of Scotland Group, 13.2 per cent
3. Yell Group, 11.2 per cent
4. DSG International, 8.7 per cent
5. Legal & General, 7.8 per cent
6. Barclays, 4.8 per cent
7. Afren, 4.6 per cent
8. Nighthawk Energy, 4.1 per cent
9. Empyrean Energy, 3.9 per cent
10. Petropavlovsk, 3.9 per cent

Sell
1. Lloyds Banking Group, 16.7 per cent
2. Royal Bank of Scotland, 14.9 per cent
3. Xstrata, 10.7 per cent
4. Yell Group, 9.4 per cent
5. Pursuit Dynamics, 6.5 per cent
6. BT Group, 5.6 per cent
7. BP, 5.1 per cent
8. Afren, 4.5 per cent
9. Nighthawk Energy, 3.6 per cent
10. Vodafone Group, 2.7 per cent