The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Have to agree with the guy on most points - this has been the problem since the boe started qe around 2008. Everytime the bank want to stop qe the markets go wild, the markets want the money injection in the arm and stamp their feet at the sniff of it coming to an end.
https://youtu.be/fMqfQvmHEko?t=933
UK housing market frenzy shows no signs of slowing, that's the headline today.
When will it burst, will it bust?? Who is going to stick their cash into stocks or other financials when house buying is a sure profit. Buy a house, rent it out, pays the mortgage, for a year or several, sell the house on at huge profit.
The housing bubble has continued to expand, and its savers who have suffered since the financial crisis. It's never ending madness, unless you're one of those who benefit from this type of investment.
It's a fallacy to think the ceo must be hoisted from his position because a mistake/problem in the company has happened, any disgruntled employee would have the power to remove a ceo if it were the case. The only time a ceo should be removed is if he was aware of the problem and did nothing or acted inappropriately
A buy rating is good, why not, they made a mistake, by not putting in a order when they were required. No fraud, the bank found and reported the mistake. What they sold anyway they would have been able to if they had put in a new order, they just forgot or thought they didn't need too. Who knows, we'll find out after the internal investigation.
Venkat has finally made an apology and said it'd not a case of IF the buyback will go ahead it's a matter of when.
The numbers from barc in q122 look very good, apart from a half billion conduct/ litigation hit. Compare q122 to conduct/litigation in q121 of £21 million. I suppose there is more fallout to come after their oversell. But have to say operations are running like a well oiled machine.
@slater606
It was Barc who reported this oversell of structured notes to the authorities when it was discovered in mid March.
Barclays were selling structured notes and because banks need to register their sales of these notes and because they don't really know how many they will sell over a given time, banks can submit an Shelf Registration, a sort of licence to sell a given quota without having to register the sale for every structured note sold. Barc status as a structured note seller used to be WKSI or "Well known seasoned issuer" which meant their shelf registration auto renewed. However, barc's WKSI was revoked in 2017 for wrong doing. For some reason barc thought it had regained its wksi status and that's its quota would automatically rescale up.
But here's something to consider, where were SEC when Barc was buying 15Bn over their allowed quota, aren't the SEC or someone supposed to be monitoring what banks are up too, they have the Shelf Registration system in place but its not being monitored???
J P Morgans Uk Chase bank is hot on the heels of Uk banks too. They're offering a 1.5% savers account which is 15 - 150 times more than the likes of Barclays or LLoyds. Santander the spanish lender offer better rates than Uk banks
Its a pincer movement on barclays
The selling of the 500miilion + shares by the big investor(s) has to be through the shear frustration of being a shareholder in Barclays. My god I've felt the frustration myself, Barclays have this annoying habit of putting one foot forward and taking several steps back, shareholders have been having a RAW deal for years. Record profits in 2021 and a 4p dividend - crumbs. The buyback is a case of one step forward and another back, its a token gesture. We've heard small nuggets of info from the media about the current problem, but where are the face to face interviews with the COE or a Barc rep to carry out some sort of damage limitation - just a wall of silence. Does Vencat even speak, not heard anything from him, at least with Jess you would get the face to face on Bloomberg. The longer they leave the rumours spread the greater the damage - as the saying goes "**** sticks". Are we in for a new CEO, how many have we had since 2008??
Barc should put some money aside to build an asylum for its poor share holders, a retreat for us to get psychological help!!!
The revenge of Jess Staley!!!
The bank was doing so well too, now this blemish on the company. Not the worst problem the company has faced , the bank will recover and hopefully come out stronger.
Really, how does a department continue overselling billions of dollars in bonds and not a single person notices. Don't they have computer systems programmed to check limits calculate sales ect, people to go over the numbers? Christ, is the department a one man band, has John McFarlane, Mack the knife, gone a step too far cutting costs?
Or maybe this was sabotage?
It seems barc has been selling investments of some kind that they did not have the rights to sell and so barc have to buy the investments back from the buyer at market value. The estimated loss is around £450 million.
The reputational loss to barc is in all probability a lot higher!!
In 2008 Barc had around 8Bln shares in circulation, today that number has doubled and the dividend is a fraction of what it was pre 2008. In addition, the companies assets have ballooned, the company is in a far better situation than 2008, owner equity has more than doubled, company profits have hit record levels and still the dividend is a fraction of what it was pre 2008.
Barclays issue shares and buy them back over the year, the net result is always negative. In 2010 the shares in issue where approximately 12,00m today the shares in issue are approx 16,000m plus. As the number of share in circulation goes up the value of the shares comes down.
The rhetoric is - Total capital return including ordinary dividend and share
buyback of £2 billion
The reality:
Ordinary shares in issue for respective years:
2018 = 70,812m
2019 = 70,956m
2020 = 70,979m
2021 = 70,996m
And each year the number of shares increases
How does it make you feel that only 10% of the £1 bn buyback actually benefits the shareholder. Barclays issued £1.12 bn in shares during 2021 and are buying back £1.2 bn
Hence the reason Barclays share price does not rise by much during a Barclays buyback, so what they are giving back to the owners of the company (shareholders) is considerably less than the headline figure.