LONDON – British Barclays Plc’s shares tumbled a third in value to a 24-year low on yesterday as the threat it needs to raise funds or could be nationalised continued to dog the bank.
The risk of nationalisation is such that the risk/reward doesn’t compute. It’s a speculative buy at best,’ one dealer said.
In morning trader Barclays shares were down 23 per cent at 56,5 pence, after sinking to 47,3 pence, their lowest level since 1985. They were on course for a seventh straight day of losses.
Rival Lloyds Banking Group’s shares were down 15 per cent at 38 pence, as it faces an even greater risk of nationalisation, analysts said. Britain already has a 43 percent stake in the lender.
Barclays has avoided selling the government an equity stake, but analysts said it would be next in line if its rivals go into state hands.
Barclays said on Friday its 2008 profit would be above 5,3 billion pounds even after writedowns, but the update failed to reassure investors about its capital position. Following the slump in its shares any fundraising would be painfully dilutive for shareholders.
One dealer said there was talk the bank would bring forward its results from February 17. Barclays could not immediately be reached for comment.
Other banks showed less dramatic moves. RBS shares were up 6,8 per cent at 11 pence, while HSBC and Standard Chartered were both near flat. – Nampa-Reuters
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