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Non-Tech : Bill Wexler's Trading Cabana
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To: RockyBalboa who wrote (4781)1/26/2009 4:40:03 AM
From: RockyBalboa  Read Replies (1) of 6370
 
And once more: Barclays shares surge 40 percent after profits letter

LONDON (Reuters) - Shares in Barclays jumped 40 percent on Monday, snapping a nine session losing streak as the under-pressure bank said it sees significant pretax profits in 2008 and is not seeking any further capital raising.

In an open letter to shareholders and customers, published on Monday, Barclays repeated its forecast, issued on January 16, that it expected to report a full-year profit before tax "well ahead" of the market's consensus estimate of 5.3 billion pounds.

"The profit is struck after all costs, impairment and market valuations," totalling 8 billion pounds, the bank added.

Barclays also said it had 36 billion pounds in committed equity capital and reserves and was not seeking new capital from either the British government or the private sector.

"If Barclays is able to avoid capital raising until after the end of June it would unwind much of the damage done in the past week, as it would avoid triggering the anti-dilution clauses in the Middle East contracts," Ian Gordon, analyst at Exane BNP Paribas.

Middle East investors pumped 7 billion pounds into Barclays in October, and a clause in that deal said if the bank raised more capital before June they would receive a greater number of shares for their original investment.

Before the bounce Barclays' shares had lost more than two-thirds of their value over the last two weeks on concerns the bank will be forced to raise fresh capital as writedowns mount in tandem with the slowing global economy.

(Reporting by Jon Hopkins)
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