Barclays tipped for better days after share battering
BANK shares are battered. As proxies for the UK economy, our big lenders have not done well of late.
For bank investors there was a nudge of optimism today from one of the top City analysts when Ian Gordon at Investec told his clients to buy Barclays.
While the “outlook for revenues with Barclays UK and the US cards business is awful,” Gordon expects another bumper result from the investment bank — the part that some wanted it to ditch altogether — to keep the company profitable.
Barclays shares moved up 2p to 114p — they were about 180p before Covid-19 emerged.
Gordon thinks Lloyds and Paragon are also a Buy since the shares look cheap given that results have been, as he puts it, “less bad than expected”.
Lloyds was steady at a paltry 29p, Paragon rose 4p to 339p and RBS moved up 2p to 120p. For the Government to break even on its bail-out of the bank, that stock needs to be 550p, a price that is not going to be reached in the life of the present administration, if ever.
The wider market rose after three down days. The FTSE 100 was up 14.44 at 6,064.06 and the UK-focused FTSE 250 followed, up 105.86 at 17,090.99.
However the Bank of England warning that stress in financial markets could make a comeback suggested that traders have good reason to remain jittery.
With the oil price again sliding, Shell, down 15p at 1167p and BP, down 2.5p at 287.5p, were among the losers. Analysts say demand for oil is the lowest it has been for decades and government attempts to phase out fossil fuels don’t offer hope for the industry as a whole.
Winners were thin on the ground, but National Grid bounced back from a row with Ofgem yesterday, up 11p at 861p.
Elsewhere, Senior, the maker of tech parts for planes, bombs and automobiles, said its half-year performance was “robust” although revenues are down 30%. It had already laid off staff and expects to lose more.
CEO David Squires was blunt: “Based on our analysis of economic and industry expert forecasts, and our customers response to those, we expect the difficult conditions to remain for many months to come.”
The shares fell 2p to 58p.