Shares in Barclays fall 3.1 percent to 310.30 pencefollowing weekend media reports that the UK lender sounded outinvestors about a possible 4 billion pound ($6.2 billion) rightsissue in order to meet tougher UK rules on capital.
Barclays is expected to set out plans either to sell bonds,known as CoCos, that are wiped out if it hits trouble or toraise equity when it publishes results on Tuesday.
Sources familiar with the matter told Reuters last week thatan equity fundraising was an option but not the bank's preferredone.
"If Barclays does raise as much as 4 billion pounds'surplus' equity, on which it will earn little return, theincremental drag on RoE (Return on Equity) will likely limit ourview on fair value to c.345 pence (our current target),"Investec Securities says in a note.
"If Barclays has the courage to say no, we would see furtherupside, but sadly, this appears less likely."
Trading volume in Barclays is robust, at 50 percent of the90-day daily average, against the FTSE 100 index on just 18percent.
Reuters messagingrm://rm://matt.scuffham.thomsonreuters.com@reuters.net tricia.wright.thomsonreuters.com@reuters.net($1 = 0.6506 British pounds)