Barclays shares offer hint ahead of showdown

Shares signal underlying shareholder support

Shares signal underlying shareholder support

CEO Jes Staley’s prized IB has managed to outdo itself on the downside, again, with revenues 29% lower on the year, contributing to net operating income that’s 2.6% short of unchallenging consensus. To be sure,  those low expectations cushion the extent of disappointment. Barclays shares were down little more than 3% a little earlier. More positively, it even showed further signs of building a consistently defended markets franchise. FICC outshone Wall Street for a second consecutive quarter with a 4% rise to $902m, mostly on bonds. Unfortunately, Markets retreated 6% overall as Equities tanked 21%. Even with a 9% return on equity, Markets still cost more than it made.

Staley is less culpable for deterioration elsewhere. Consumer lending softened in line with Brexit and Europe’s slowdown. But he’s still more likely to burnish Barclays’s capacity for greater efficiency, than to suggest an IB turnaround anytime soon. A 4% drop in expenses might turn out to be Barclays’s best defence at next week’s AGM showdown. Shareholders will vote on whether to grant activist Edward Bramson a board seat. All signs suggest it’s too close to call. Yet after a lacklustre quarter, a cushioned share price fall suggests quieter investors remain reasonably patient.

BARC’s end-2018 annual low of 145p is well defended by c. 152p January-March lows, but price still faces structural challenges. The 200-day trend weighs heavy and it’s little wonder last week’s attempted breach failed. That confirmed 170p (28th November failure high) as key resistance, echoing tops over the last couple of months. A break below the wedge forming since March seems inevitable. After that, 152p will be tested again.

Barclays CFD – Daily [4/25/2019]

Source: City Index



Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.