This will be another week to
forget for Barclays after more controversy embroiled the firm. Shares fell
following news that New York’s special securities regulator was to sue the bank
for allegedly misleading its institutional investors using its “dark pools” in
favour of high frequency traders. The idea of a dark pool is that it allows
investors to be anonymous when they trade big blocks of shares. Barclays’ shares
were weaker over fears for the imposition of fines as well as a loss to future
business and yet more damage to its reputation.
TUI Travel, which has its
headquarters in Crawley, found some strength following news that the group was
to enter an all-share merger with its German parent company TUI AG.
Housebuilders, such as Persimmon
and Barratt Developments, were generally relieved to hear of softer than
expected measures from the Bank of England to cool the housing market. This
news temporarily lifted pressure on the sector that had been braced for potential
reactionary measures under increasing political pressures.
Burberry was another share that
found some strength, supported by an upbeat research note on the luxury goods
retailer from Barclays noting the smooth transition of management. However, the
same broker was less enthusiastic about fellow retailer Marks & Spencer
informing their clients that “consistent clothing market share losses undermine
the management’s turnaround plan”. They claimed that those investors expecting
M&S to buy back shares, boost its dividend, or receive a takeover approach
by a private equity group are likely to be disappointed.
Despite some positive news for
the economy, most markets had a flat week.
In months past we would have attributed it to fears of earlier rate hikes
but instead this is being described as a response to fears of escalation in the
Middle East. Geopolitics seems to have trumped monetary policy and a Chinese
slowdown as the greatest fear on the minds of investors as evidence by a number
of recent investor surveys.
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