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Maybe tomorrow but if not almost certainly by early next week if I think you will be right.
An increase in interest rates should be good for the banks - they can charge more for mortgages, loans, overdrafts etc and as we all know they rarely increase interest rates on savings accounts by the same amount that they loan money out.
Currently Barclay's share price seems to be in that zone where the market is ramping it up to around the £1.61 level and then over-selling before a nice little jump again. For us private investors selling the highs and then buying back on the dips isn't going to make us much money, on the margins that the institutional investors operate on you can make a tidy profit.
I'll stick my neck out again, given that Barcs has just fallen 6p in a little over a day and is still falling. On 3rd Nov, the day of the last BOE rates rise, the Barcs SP fell to £1.46. The following day it closed out at £1.53. I predict it will hit back to touch £1.61 at some time tomorrow. If I had the money, I'd put it where my mouth is, but I don't and I don't expect anyone to follow my advice. GLA.
The Financial Planning and wealth management sectors have welcomed radical proposals from the Chancellor to shake-up financial services regulation via the Edinburgh Reforms.
https://www.financialplanningtoday.co.uk/news/item/15445-chancellor-s-edinburgh-reforms-win-industry-backing
UK banks have performed poorly since 2008 but should do much better after these reforms imo.
"Never again" in banking terms means "Not for seven years".
Well this time it meant fourteen years lol.
One comment from the last banking crash sticks firmly in my mind.
"Never again" in banking terms means "Not for seven years".
While I absolutely support the concept of deregulation and minimal government in life generally (if only!), I trust JH as much as I could throw Boris, using only my left pinky finger. The CBDC mention sends chills down my spine. Hopefully they give it to one of their friends or family members to manage. Maybe that way it will never get to launch. This is clearly a plan for our own Social Credit system. I also do not like the idea of essentially no responsibility for senior managers, who make seriously unwise business calls. Having been a director myself of several companies, I always took such responsibilities seriously and had no issue with the buck stopping with me, if I did something that merited personal consequences. That is IMO an essential risk management tool. I just hope it does not lead to history repeating itself again in this niche. Anyway, good to see a rise in the SP today. Despite all the dreadful and IMO underestimated, macro headwinds, I do have a soft spot for BARC and hope it will prove itself worthy :) GLA.
Thanks Seav - I didn't see that.
"JPM upgraded Barclays to 'overweight' from 'neutral' and lifted the price target to 220p from 180p, saying it was its new UK banks "top pick".
Was the reason for today's rise.
Fair point M1k3y. My own view is that this will likely make significantly more over 18 months than 7% as i think it will rerate, assuming that is there are no more misconduct issues. Short term, I have no strong feelings. I do think the share buy-backs will impact the share price at some point. Its 40% dollar exposure is, I think a plus, when there is so much negativity around the UK which is why it is my preferred pick in the banking sector. On the downside, like most investment banks, Barc always rewards its bankers ahead of shareholders despite the losses long time holders have had to stomach. Only time will tell as always.
I am looking for at least 180p. I currently have two fairly small tranches. One I may keep for a LTH, the other I have in mind this price target. Originally, I planned to wait and see if we revisited 140p territory, but decided to put a toe in the water sooner. I will buy more if we revisit that level. Unless something very serious and company-specific comes out. If we see a liquidity crisis and a real SP drop, which would be mirrored across the markets, I will buy more. I only invest what I can afford to lose entirely. While nothing is certain, I do not consider BARC to be a particularly risky investment over a long enough time-frame. Now I have said that....probably best to go short! :)
I have nothing concrete to add which would explain today's rise, but the shareprice looks like it is simply bouncing around between the £1.57/£1.61 levels, other than a sniff of a breakout above the upper limit it's been at this level for a couple of weeks now.
There's some money to be made buying the dips and selling the highs, but only if you have reasonably deep pockets.
Thank you. I will do my best to avoid straying from the path of good grammar. I do err myself from time to time :)
Welcome LWHL. We are a friendly bunch here, differing views at times but pretty much always well debated/discussed (unless your Grammar is bad like mine :) )
Perhaps some rotation from other banks that appear more fully priced than BARC? As a recent joiner, I hope to see the SP continue the rise, whatever the reason! GLA.
Can't make it out with Barcs over the last few days. The SP seems to have gone in entirely the opposite direction to all other banks. Anyone offer an explanation?
Poor dividend return and the only reason you would invest now is on a recovery play.
When you can get 7% in a deposit account , why would you invest in BARC with such a poor divi return ?
What is worth noting is that NatWest has just overtaken Barclay's in terms of market cap - £31bn v £30.7bn.
I wouldn't pay much attention to the actual shareprices - NWG have had a couple of share consolidations, the most recent a couple of months ago which has shoved their shareprice up a bit.
Their relative P/E ratings are different - NWG - 9.5% while Barc is lingering at 5.09%. Barclays is too low for a company that registered a profit of £8.4bn earlier this year.
NatWest though did give the punters a special dividend this autumn - 16.8 pence a share.
lowest p/e and book value by far, of any global bank, a very large skeleton in the cupboard?, must be on someone's radar if not...
It wasn't that long ago Barc and NW group had a parity share price and now NWG are £1+ up on us...I've definitely backed the wrong horse in the banking world..Hoping Barc become a take over target for someone...????
Thanks badjob. Interesting your comment re. Natwest. I was only thinking how poor Barcs performance has been in the last couple of days compared to the other UK banks and noticed how Barcs had fallen nearly 1% today, whereas Natwest rose 1.75%. No obvious reason for it that I can see, other than the sentiment point you make. We'll see what next week brings.
The underlying business seems to be very solid and the share price underperformance is, I think, more driven by sentiment that any reflection of that business performance. I notice that NWG now has a higher market cap than Barclays and yet its 9 months profits are only slightly above 50% of Barclays and that's after Barclays has suffered the over-issue costs. But for that fiasco, it's figures would be astonishingly good. I don't think the relative share price under-performance is sustainable in the long term. It has a better geographic spread with 40% of earnings in dollars , an investment bank that is performing well plus the retail banking. If anything, that diversity should justify a premium over its peers. - particularly if Barclays starts dishing out the cash. It is claiming a 10.5% pay-out for the last year taking into account buy-backs which sounds pretty chunky - though that may exaggerate things as it is the net of new issuance buy-back figure that really counts. . If it can make total pay-outs in the 10% region going forward the price will have to react at some point or it should take full advantage and really try to drive down the number of shares in issue. Charts have their uses but underlying performance is key at the end of the day.
I confess Bhavik I don't get charts, but have yet to see one posted on this site that delivers what is predicted. It has been a pretty disappointing couple of days for Barcs and a fall I didn't see coming, after the stellar day on the American markets a couple of days ago. Having reached 1.62, it now seems to be falling back to the low 1.50's (hope I am wrong), rather than kicking on to the chart predicted 1.69. Still I recognise it can be argued that in getting to 1.69 there will be bumps on the road, just as it can be said there will be good days on a fall back to the 1.40's. My take on it is that having done well to climb to 1.60 from a position of around 1.35 during a recession, it is running out of steam. And without forward momentum, investors don't like the doldrums, thus precipitating a fall. Hopefully some good global or economic news can inject some momentum early next week.
https://www.cityam.com/barclays-slapped-with-8-4m-fine-over-card-payment-failings/
....not material financially, but none the less another failing of Barclays Management Team.