CFD Traders Diary
Possible sale of Barclays Asset Management drives the markets higher
15/5/2009
For bulls of the banking sector in general and Barclays (BARC) in particular, the exceptionally sharp rally from 47p at the low in January to as high as 300p earlier this month, has not only been a sign that the sell off in the bank itself was overdone, but that the bull market is back for the stock market as a whole. But even though the ongoing speculation has been a powerful driver for the share price, with the markets still in early recovery mode, it is reasonable to expect ongoing speculation to continue driving the share price. The focus in today's financial press is been on both the well documented sale of the iShares unit, and new developments regarding the sale of the asset management business. The best guess at this stage is that if Barclays has found a buyer for the asset management side of business, it may not need to sell iShares after all. Whatever the eventual outcome may be, the news has served to drive shares higher, with Barclay shares up as much as 10%. Fellow banks Lloyds Banking (LLOY) and RBS (RBS) also traded higher on the improved sentiment, both ahead some 5% and recouping some of the hefty losses from earlier in the week.
Although Rio Tinto (RIO) may well have boxed itself into a corner by making clear it prefers the Chinalco fund raising route, for the present the stock market has given the mining giant the benefit of the doubt, prompting a 5% recovery in the share price.
On the corporate news front, product tester Intertek (ITRK) led the way, reporting a revenue boost of some 42% during the first four months of 2009. On closer examination though, 30% of this revenue was due to favourable foreign exchange movements, and the stock fell 3%.
The punters were clear winners at bookmaker Ladbrokes (LAD). Shares fell some 7% after punters cleaned up at the March Cheltenham Festival. Other negatives included high online development costs, and free bet offers to encourage new clients
