The problems and potential at Barclays can be summed up in its forecast EPS figures: a drop of 18% this year, a leap of 57% next. If you can take the short-term pain, there could be plenty of long-term gain. At some point, the banks will enjoyÂ another burst of share price recovery, until they become what they always should have been, steady long-term income plays. Barclays and HSBC could easily thrash the FTSE 100 over the next five years. One day, RBS shouldÂ also return, Lazarus-like,Â fromÂ the dead. You just might have to wait a bitÂ longer for that. Miracles take time.
The last few years have been woeful for the banking sector. Just look at these nightmarish performance figures. Over three years, Barclays (LSE: BARC) is down 36%. HSBC Holdings (LSE: HSBA), once thought to be the "good bank", is down 38%. AndÂ Royal Bank of Scotland Group (LSE: RBS), unquestionably the baddest of the bad since 2008, is down 23%. Big and bad This has been a tough three years for stock markets generally, but notÂ THAT tough. The FTSE 100 is down "just" 4.75% over the same period. Banks have been a dreadful place to put your money in recent years, as the optimism generated duringÂ the share price recovery in 2012 and 2013 proved illusory. All three are down around 30% in the last year alone. Which looks like a buying opportunity if ever I saw one. Barclays, HSBC and RBS have picked up in recent days, helped by a surprisingly timid report from the Competition & Markets Authority. At some point investors feared the CMA might evenÂ order the big retail banks to be broken up toÂ boost competition and get customersÂ switching. There was also talk of forcing banks to renounceÂ their 'free' banking model and insisting they charge for current accounts instead. Instead, the CMA brought forth a mouse, including a limit on overdraft charges and a new comparison site to make switching easier, as if the world needs more comparison sites. But it'sÂ good news for the big four. The tragedy continues As Tolstoy pretty much wrote: all happyÂ banks are alike, each unhappyÂ bank is unhappyÂ in its own way. Barclays is still battling to rundown its 'bad bank' while establishingÂ its new retail and corporate &Â investment banking divisions. Dividend growth continues to disappoint with a forecast yield of just 1.7%.Â HSBC avoided the worst of the credit crunch but its share price has been punished by the emerging markets rout, leaving theÂ yield onÂ a crazy high of 7.71%. RBS remains the blackÂ sheep with no dividend and it also faces a furtherÂ billion pounds of restructuring costs and Â£1.5bn of disposal losses in the Capital Resolution portfolio this year. At some point the toxic sludge will melt away, along with today's negative sentiment. The only question is when. I believeÂ HSBC is the most attractive of the three, because you get a fabulous income stream while waiting for that question to be answered. Earnings per share (EPS) areÂ expected to fall another 7% this year, but 2o17Â may look a lot brighter, with EPS forecast to rebound 7%. Let'sÂ just hopeÂ a Chinese hard-landing doesn't getÂ in the way. Comeback kids The problems and potential at Barclays can be summed up in its forecast EPS figures: a drop of 18% this year, a leap of 57% next. If you can take the shor
BWK..Who'd have thought Corbyn would be leader ? Who'd have thought Leicester would be Premiership champs.(claerly not the bookies.lol) who'd have thought etc etc..amazing stuff happens but what kind of choice do the americans have with Clinton being regarded as untrustworty by many and Trump as dangerous ?
Clinton is very vulnerable to all manner of neagative issues that Trump will fire off at her nit least the Email debacle. There's the Libya incident too, I think there's still something ongoing re. Property loans in Arkansas..her and Bill. Trump is going to drag up all sorts of stuff about Bill who,I'm sure he wil have you believe will be the power behind the throne. Maybe Trump will successfully back pedal on some if his more inflammatory comments but it's hard tonsee how. The one thing thst might get him home and dry is the weariness many have with the 'same old ' and they just don't care what Trump will do. Ican't see Sanders geting the nomination,it will be Hillary.
Hilllary's chief of staff,Cheryl Mills was giving evidence yesteday re.the Email civil case. It accuses her of deliberately thwarting the Freedom of Information Act. Mills was desperately trying to stop a video of her evidence from getting into the public domain. Clinton is saying she used a private Email account for convenience and it had been permitted,she added that she would co- operate with any inquiry but then refused to be interviewed. Seems an attempt to hack into her Emails in 2011 was kept secret.members of her staff expressed their misgivings thst she kept her server at her home in NY that lead to the State dept telling them to refrain from talikng about it.
Didn't she visit somewhere ..Afghanistan ? and said that as she alighted from the helicopter it came under fire ? Then video footage emerged clearly showing no such attack took place so one of her aides said she had 'misspoken', lied would be the correct term. You can now hear that stupid term being used for all sorts..mis this, mis that as well as the original misspoke. Is that how it's spelt ? Mis-spoke maybe. Fair play to whoever thought up that one, I take my hat off to him/her.
I wouldn't bet against Trump. I don't think he'll build a wall though in TX and AZ...so I won't,as mentioned by Picket , be buying into US cement companies..lol
I'm really pleased to see the sp of JP Morgan..sorry, Barcs..lol improve so much. It's all looking a lot more positive than the recent past.
LONDON, May 27 (IFR) - Barclays (LSE: BARC.L - news) has hired Mark Ashton-Rigby as its new chief information officer, the fifth former JP Morgan senior executive to be recruited by the bank. Ashton-Rigby is currently chief information officer for corporate and investment banking at JP Morgan but will move to Barclays in August and be based in London, the UK bank said. He will be responsible for "defining and executing Barclays' technology strategy to make technology a competitive advantage," the bank said in a memo to staff. Ashton-Rigby has spent three years at JP Morgan and previously worked at UBS (LSE: 0QNR.L - news) and Deutsche Bank (LSE: 0H7D.L - news) . He joins a list of former JP Morgan bankers to move to Barclays, including CEO Jes Staley, the former JP Morgan investment bank boss. Finance director Tushar Morzaria also previously worked at JP Morgan, as did Paul Compton, who was this year hired as chief operating officer, and chief risk officer CS Venkatakrishnan. Ashton-Rigby will report to Compton. It (Other OTC: ITGL - news) means Barclays' CEO, CFO, COO, CRO and CIO will have all worked for much of their career at JP Morgan, which prides itself on having a deep bench of talented bankers. Ashton-Rigby replaces Ian Buchanan, who left Barclays (Swiss: BARC.SW - news) earlier this year.
Barbedwirekiss , hopefully it is the 'Donald' as that makes my next investment strategy easy. It's got to be all in on cement companies as this 'Wall' he's going to build should make the Great Wall of China look like a dry stone dyke!! ATB
Barcs has been on a good run up since about May 6 with a "kick up" on May 18. I think that a number of things have helped generate some positive sentiment to the investing world mainly:
- Brexit, it seems likely (AKA the bookies reckon) that the UK will stay in the EU - Greece, the Greeks have been granted the next payment to keep themselves ticking over
I saw today a report that oil has hit $50/barrel (briefly) which may be seen as "good" for the oil companies. I think it's probably also good for banks and money factors as this (potentially) increases the amount of cash that they will be handling and so the amount they pick up in processing charges.
Another point that 'may' have a positive effect is the situation that 'The Donald' has now reached the number of delegates needed to pick up the Republican Party's nomination for the presidential slot. This removes some uncertainty from the US presidential elections, it's either Trump or... whoever the Democrats pick. Personally I think that this means that the Democrats will win the presidential slot. It can't possibly be The Donald, can it?
Whatever is causing this nice uptick in the SP may it continue for a while. Whatever happens I've got my trailing stop set so should be alright whatever happens.
LONDON (ShareCast) - (ShareCast News) - Exane BNP Paribas upgraded Barclays (LSE: BARC.L - news) to 'outperform' from 'neutral' and lifted the price target 19% to 220p, having already upped the stock two weeks ago, saying things were looking brighter and the fog is lifting. Exane said Barclays' decision to cut the dividend and sell the African operations - announced in February - largely addresses the equity issue and gives more flexibility to improve efficiency in its capital base. In addition, it said the earnings uplift as securities are extinguished is no longer a distant prospect. "Our latest work increases our confidence in the longer term return potential of the group. We still see challenges to underlying profit progression and believe consensus might be too optimistic here, but the tailwinds from redemptions of capital securities provides a substantial offset," Exane said. Exane said it is now confident Barclays can boost earnings by about 20% and improve return on tangible equity by up to 2 percentage points over the next few years through debt restructuring alone. It (Other OTC: ITGL - news) reckons much of this can be achieved by 2019 and said neither it nor consensus has this in the numbers. Exane said the investment case for Barclays is building and the stock offers a total shareholder return of 23% over the next year.
Bert, Comments appreciated. I remain confident of exiting all at profit eventually, just unsure when. A hard call. Academic even trying to call it beyond saying, probably 2017 for my last lot.
Re this rally: beyond what we know being priced in, ie. most polls predicting Brexit loss, Fed rate hike likely in June & commodities recovering a bit, I've my doubts. Seems mostly sentiment-driven. Some Western indices looking distinctly toppy.
DOW saw all-time closing high of 18,312+ May last year, but that was during heady times of QE stimulus. It won’t take much for DOW to go closer to re-testing those highs. It can easily see 200+ pts on a VG day.
Yet some global macro-factors remain bearish: Asian economic woes with no quick fix, mounting debt levels, generally poor Q1 results, etc. &, that's without known problems for banking sector, for eg. more litigation.
Overall, IMO, this bull run seems unlikely to last long. Naturally, hope I’m wrong as little would please me more than seeing higher still & reaching my next target, circa 230+, sooner than later. :o)
Always good to read your thoughts. I to noted the 50% drop in divi without the corresponding drop in bonus quite a while back and echoed your words. "We have to keep the best people" the board say, hmm I think, best at what? Not producing a divi that's for sure. I do not know what has caused recent rise, something may come out soon or like you say it might be a suckers rally. The fall from £2.80 did not give a reason until much later on after new CEO kitchen sinked us. GL with your last tranches, I know you will do OK, best regards TTFN.
Hi Bert, I hope you're well & thanks for posting. Genuinely glad for you seeing an okay resolution here. I always say, best follow your own deductions & if satisfied with closing any position at profit, then well done. Market always provides decent opps elsewhere for the patient.
IMO, this market is wholly irrational. Many stocks can soon get oversold & overbought. With thinner volumes over summer, we can expect greater volatility. We could be higher in next few days & still be filling a price gap at 155 here before summer's over. That's how unpredictable things seem.
This could also be a so-called "suckers rally".
I won't repeat my recent posts, but today I sold the 3rd of 5 BARC tranches originally held, all at profit + 3.5 divis on top. I look forward to the day I can sell the remaining 2 at gain.
As mentioned a few weeks ago, had I a strong inkling that divis would be cut by 50%+ for 2 years, whilst their bonus pool was virtually intact (the stated 10% cut is meaningless in view of all the job cuts on the IB side), I'd never have touched this. Big error, but now my exposure has been cut massively, I feel more comfortable about riding the rest out.
Also hold HSBA, but at least that pays me an excellent 7%+ divi for my paper loss.
Have plenty of spare cash, but I don't mind sitting on it a while longer. Will keep an eye on BP, et al, but also watching a few miners & LLOY's on any retreat before 23 June. Don't rule out buying more HSBC, but no rushed decisions.
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