Member Info for MrAltruistic

Evening All,

Back from a short mini-break so finally catching up with the board. Looks like the first four suggestions of my “Reasons to be Cheerful” seem to have come to fruition.

1. The short-term (unbroken) ‘floor’ appears to be 128p. ✅ Last seen on Wed 1 Nov 23.

2. Week on week small incremental upward movements now in action ✅ Not a perfect straight line but pretty close.

Close on Fri 27 Oct was 129.20p

Close on Fri 3 Nov was 136.34p

Close on Fri 10 Nov was 135.58p

Close on Fri 17 Nov was 142.80p

3. USA and UK Base rates are either close to and/or reached the top? ✅ Speculation has now begun as to when the first Base Rate Cuts will now take place on both sides of the pond. UK suggested as early as April 2024.

4. UK inflation continues to deflate meaning less Business Failures, repossessions and Bad Debts. ✅ The rationale for a ‘spike up’ in the Financial Sector.

@JayK. My ‘big’ trade is doing pretty well at the moment thank-you. But you know how quick these markets can turn on a sixpence so I will not be hanging out the bunting quite yet. Still aiming for my 10% and feel that more of my “suggestions”, short term, can still be met. Hope your eldest and the ‘clan’ are now over the worst. Not sure what car you have for sale but typically this is now the time that the ‘dealers’ de-stock and reduce volumes on the forecourt. Not a great time to sell. If you can wait until March for new registrations, then it may be more prudent? Not sure if the car will depreciate much in 4 months? As for not buying more in the lower 30’s… plenty more trades in the future.

@MrW. Haven’t set a Stop Loss yet. Agree we are still in the thick of it. However, the game is afoot! As it stands, and to repeat, I still see more of my short term “suggestions” coming to the boil. If everything goes to plan, probably will bail at some stage in the New Year BUT before the full year results. The fact Venkat has indicated a restructuring is to be announced, at an inevitable substantial cost, does not fill me with any confidence whatsoever. The Senior Team have been consistent in disappointing both the market and investors time and time again and even at this early stage, once the details have been announced, I see another drop in the price when the announcement is made on Full Year Results day. The upside may be another buying opportunity? Anyway, time will make things clearer. That’s my simple strategy this evening… all subject to market conditions of course. That said, if 150p arrives then I would apply a Stop Loss at 145p to protect my gains which would then be pretty much my 10% target.

Regards, MrA.

Would be positive to see 140p reached… and held.

Regards, MrA

….and UK CPI falls from 6.7% to 4.6%.

Regards MrA

Morning All,

So I would expect another positive day today, not sure the strength of positivity, but a ‘blue’ day none the less… fingers crossed.

Regards, MrA

Afternoon All,

For Information Purposes and as shared from the Financial Times. Hopefully the table 'pastes' in a readable format?

Regards,

Mr A

https://markets.ft.com/data/equities/tearsheet/profile?s=BARC:LSE

Let’s look at some of Barclays' largest shareholders.

Holder Shares % Held

Credit Suisse Asset Management (Schweiz) AGAS OF 01 SEP 2023 852.58m 5.60%

Dodge & CoxAS OF 01 SEP 2023 615.02m 4.04%

BlackRock Investment Management (UK) Ltd.AS OF 31 DEC 2022 566.70m 3.72%

The Vanguard Group, Inc.AS OF 01 SEP 2023 520.41m 3.42%

BlackRock Fund AdvisorsAS OF 01 SEP 2023 424.83m 2.79%

Causeway Capital Management LLCAS OF 01 SEP 2023 268.54m 1.76%

Legal & General Investment Management Ltd.AS OF 01 SEP 2023 261.57m 1.72%

BlackRock Advisors (UK) Ltd.AS OF 01 SEP 2023 216.71m 1.42%

FIL Investment Advisors (UK) Ltd.AS OF 01 SEP 2023 214.24m 1.41%

Natixis Investment Managers International SAAS OF 01 SEP 2023 205.06m 1.35%

Part 3

But while such strategies have helped to keep Barclays in the black throughout the pandemic and the current bout of inflation-led economic malaise, management faces a battle to convince investors they can depend on those returns.

Barclays' goal is to hit a return on tangible equity, a key measure of profitability, of more than 10%. While its British retail and business banking arm delivered 18% in 2022, the two other divisions which house payments and investment banking narrowly scraped the 10% goal.

"We estimate the bank ought to be able to generate around 19 billion pounds of profit over the course of 2023-2025, and we believe more of this should be returned to shareholders to better address the share price weakness as opposed to another strategy review," Jefferies analysts said in a note.

($1 = 0.7736 pounds)

Part 2

'NERVOUS'

For Venkat, as the veteran banker is commonly known, the stakes are high.

Two years into his tenure, Barclays' stock price to tangible book value, a measure of market value against assets, is 0.54, the lowest among major British banks and well below rival HSBC's (HSBA.L) 0.87, Refinitiv data shows.

Barclays emerged from the 2008 financial crisis with a once-in-a-generation opportunity to bulk up on Wall Street, after buying Lehman Brothers' U.S. operations. But nailing the right business mix to woo new investors without repelling its more conservative backers has challenged executives ever since.

After defeating a push by activist investor Edward Bramson to shrink its investment bank in 2021, the 330-year old lender has stuck to its transatlantic universal banking model spanning investment banking, and consumer and corporate lending, gradually growing group profits.

But a recent shake-up at its investment bank has raised concern about Barclays' ability to compete amid a worldwide dealmaking slump.

A U.S. securities trading blunder that triggered a $361 million regulatory penalty and blighted recent earnings remains a drag on shareholder confidence too.

That has made investors "nervous about investment over the simple maths of buying back shares at half book value," said Richard Buxton, investment manager at Jupiter Asset Management (JUP.L), a top 25 Barclays shareholder, according to Refinitiv.

"I can understand why Barclays wants to invest more behind sub-scale businesses if they can evidence getting the returns from them," he added.

Some smaller investors hope the BCG review might offer a fresh take on whether an investment banking spinoff could give shareholders the value they crave.

"You might get a better valuation if you demerge the investment bank ... They are not valued properly together," said Alan Beaney, chief executive at RC Brown Investment Management, which has held Barclays shares since 2012.

A Barclays spokesperson said the bank's businesses continued to perform well and its business mix was "robust".

OVERHAULS

Barclays has also engaged another global consultancy to analyse whether some of its payments businesses should be expanded or combined with other providers, Reuters reported in June.

Meanwhile, Barclays' stock has fallen around 3.5% this year, underperforming a 10% gain in a benchmark index of European banks (.SX7P) and internationally-focused European rivals like BNP Paribas (BNPP.PA) and HSBC, which have risen by around 5.5% and 18% respectively.

Barclays underperforms peers over the past year.

Barclays underwent several major overhauls in the decade following the 2008 financial crisis, including a 2014 jobs cull and a 2016 exit from Africa.

Barclays eyes smaller units for growth in strategic review, risks investor ire

Thursday 13 July 2023

Summary:

• Executives study allocating more capital to high-potential units

• Some shareholders, analysts would prefer stock buybacks

• Barclays shares down around 3.5% year-to-date

• Some investors question bank's overall business mix

Barclays is betting it can revive its wilting share price by upping investment in a crop of its smaller businesses including U.S. credit cards, sources familiar with the matter said. But some of its top shareholders would prefer the quicker fix of a buyback.

Chief Executive C.S. Venkatakrishnan is studying plans to allocate more capital to the bank's wealth management, U.S. credit card and global payments activities to boost returns, according to people familiar with his thinking and reported here for the first time, after drafting in Boston Consulting Group (BCG) to review strategy earlier this year.

A team of BCG consultants has taken up temporary residence at the bank's headquarters in London's Canary Wharf financial hub to help management brainstorm an optimal investment plan, one source familiar with the BCG review said.

The lender is pursuing an in-house review as well, the source added.

Another source inside Barclays' investment bank, talking anonymously because they are not authorised to speak to the media, said lower staff attrition at its technology and back office operations had started to worry cost-conscious managers.

The BCG review could lead to layoffs, the source familiar with the review said, although no decisions have been made.

"As you would expect, we frequently work with various external consultants," a Barclays spokesperson said.

A spokesperson for BCG declined to comment.

Some top Barclays investors, however, told Reuters they would have misgivings about a plan to prioritise investment over capital distributions.

They question the logic of pumping more capital into divisions that are small relative to their competitors as the global economy shivers and the lender's shares suffer.

Instead, they want to see tighter cost control, twinned with bigger buybacks and dividends after the bank completed a modest 500 million pound ($646 million) buyback programme in April.

"We are keen to see the businesses we invest in acquire and grow if they can do so in a way that adds shareholder value," said Richard Marwood, senior investment manager at Royal London Asset Management, one of Barclays' 30 largest shareholders, according to Refinitiv.

"The hurdle they have to clear is: are the acquisitions better uses of capital than retiring equity? When your shares are lowly valued, that is a tougher benchmark to beat."

Afternoon All,

A decent write up here, in my humble opinion from Reuters.com

I appreciate that it is (almost) 4 months old but it at least gives some "detail" as to the areas that the consultants at Boston Consulting Group (BCG) have been looking at.

It seems to be 'hot and cold' as to whether the web links I post seem to work, so as previously, I will paste the post.

Again, depending on the limitations of words allowed per post, the write up may appear on more than one message.

Regards,

Mr A

Part 2

Don’t expect anything radical with its investment bank. It just spent several years fighting an activist investor, Edward Bramson, who was campaigning for a breakup or major downsizing. Venkat told Bloomberg TV last week that the investment bank has the scale to compete globally and that he wants to focus on the other businesses, which are mainly UK retail banking, US credit cards and smaller private-banking and payments units.

The deal-making and trading arm consumes most of the Barclays balance sheet and often produces its weakest returns on equity. Like many Europeans, it’s stuck in the middle ground between the biggest and most profitable US investment banks, which benefit from their size and the scale of US markets, and the smaller and more profitable boutiques, which don’t need capital for lending. Barclays could make this business a bit more efficient, but it can’t really raise returns without escaping the middle ground in one direction or the other. That’s not happening.

Barclays's Biggest Business Produces Weak Returns

Its UK business produces its best returns on tangible equity of about 20%, double the investment bank. It does this even with a cost-to-income ratio that is much worse than peers. Barclays bringing expenses in line with rivals could boost UK profit by about one-fifth, according to Jason Napier, analyst at UBS Group AG. Helpful, sure, but ultimately the mature UK market isn’t going to be a leading source of growth.

Barclays Has a Cost Problem In Its British Arm

The US card business could be more lucrative if it were bigger, but growth will need to be pursued cautiously: Unsecured consumer lending is an easy place to lose a lot of money. The payments business has potential, too, even if the great boom in online retail has slowed and competition from startups and incumbents remains intense. Barclays is seeking technical help in developing this business, which might mean selling a stake to a partner — hardly a straightforward move.

So it’s tricky to discern what will make the big difference at Barclays. Growing its way into a better balance between the investment bank and everything else looks impossible without acquisitions, which it can’t afford. What Venkat wants to deliver is improved return targets and a plan for more consistent capital returns to shareholders. Perhaps the best Barclays can do is get much better at milking profit from what it has.

Venkat always seems a very smart and thoughtful leader. It’s a mystery how he’s left investors with so much uncertainty and confusion.

Barclays Created an Enigma — And That’s Not Good

Monday 6 November 2023 at 05:00 GMT

It’s a mystery how the bank’s CEO has left investors with so much uncertainty and confusion over strategy. 

The way it goes normally is someone says: Do you want the good news or the bad news? Last month, Barclays Plc. offered some bad news and left it at that.

It’s two years this month since C.S. Venkatakrishnan, who goes by Venkat, was thrust into the chief executive officer role after Jes Staley suddenly resigned because he’d been less than open about his friendship with accused sex-trafficker Jeffrey Epstein. It’s the right time for Venkat to set his own aims for the UK bank, having initially stuck with the strategy set by Staley.

A good way to do this would be to announce a review with certain parameters and some goals in mind — and set a date for the reveal. What investors have got from Barclays in recent months instead was a leak that strategy consultants from Boston Consulting Group had been hired but with scant detail of what they were looking for; then some reports that Barclays was considering options for its payments business; and finally, at third-quarter results last month, a warning that the bank might take a chunky restructuring charge in the final quarter of the year.

This last bit of news is most puzzling of all: The bank said nothing about the size or purpose of the potential charge, or how it might help any part of its business. All details will have to wait until an “investor update” planned for its 2023 earnings report in February. “If you’re going to tell people about the pain, you should be telling them about the gains as well,” said Benjamin Toms, analyst at RBC Capital Markets.

The upshot has been lost clarity and a more depressed share price. The stock dropped 6.5% after its results and subsequently hit its lowest valuation since the depths of the Covid-19 pandemic in 2020. When Venkat took over, Barclays shares traded at a price-to-earnings multiple of more than seven times; they now languish at barely more than four times, one of the lowest-valued banks in Europe, worse than both NatWest Group Plc and Deutsche Bank AG.

The playbook for strategy shake-ups is hardly unfamiliar among European banks. Typically, they announce their aims, financial targets and the costs to get there all at the same time. Warning on charges without saying what they’ll pay for is unorthodox to say the least. Barclays’ explanation is its caution about giving investors a nasty surprise at full-year results. All it has done is to tell investors to expect one.

And there’s still the question of what Barclays can even do to improve. Its investor update could yet be the dampest of squibs. The bank’s basic problem is a deeply discounted stock valuation due to underwhelming profits and low, unpredictable cash returns to shareholders. Its thornier problem is what it intends to do about it.

Afternoon All,

A decent write up here, in my humble opinion from Bloomberg.com

Only available if you are a subscriber, so to save you the bother and cost, please find my ‘gift’ to you all.

Depending on the limitations of words allowed per post, the write up may appear on more than one message.

Regards,

MrA

10. Wednesday 22nd November 23, The Autumn Statement. Strong rumours that the Chancellor intends to raise the Annual Stocks and Shares Individual Allowance to £30,000 to encourage more Share ownership. Not sure what volume of Buy transactions this would create? But as far as positive momentum goes and a possible further reason for more volume of perceived ‘low risk’ investment purchases either directly of Barclays or via the myriad of ‘tracker’ funds then this should make more than a ripple in the pond?

Regards MrA

Good Evening DrPatience,

I hope you are well? Good point well made, that could possibly be Point 9?

In addition:

10.

FTSE 100 Closed on Tues 3 Jan 23 at 7554.10

FTSE 100 Closed on Fri 3 Nov 23 at 7417.73 (136.37 points down, a decrease of 1.8052%)

Evening All,

1. Using my breach or break ‘5 consecutive days rule’, the short-term (unbroken) ‘floor’ appears to be 128p.

Fri 27 Oct, lowest intraday price 128.64p

Mon 30 Oct, lowest intraday price 128.12p

Tues 31 Oct, lowest intraday price 129.46p

Wed 1 Nov, lowest intraday price 128.92p

Thu 2 Nov, lowest intraday price 129.64p

Fri 3 Nov, lowest intraday price 132.16p

2. Week on week small incremental upward movements now starting?

Close on Fri 27 Oct was 129.20p

Close on Fri 3 Nov was 136.34p (7.14p an increase 5.526% increase)

3. USA and UK Base rates are either close to and/or reached the top. Meaning Bonds/Gilts start to potentially decrease and become less attractive and the ‘risk on’ and ‘rewards’ of Stocks becomes more appealing. Normally meaning an influx of money to the market, especially the lower risk FTSE trackers = more Barclays Shares bought.

4. UK inflation continues to deflate meaning less Business Failures, meaning less property repossessions meaning less Funds to be put to one side for future Bad Debts. Normally acts as a rationale for a ‘spike up’.

5. The Market Manipulators a.k.a. Investment Bankers will try to force the market Up, typically the FTSE 100, of which Barclays is a constituent of. They look to increase the year-end close from the year start close, to “earn” their end of year Annual Bonus. Also known as a Santa Run!

FTSE 100 Closed on Tues 3 Jan 23 at 7554.10

FTSE 100 Closed on Tues 3 Jan 23 at 7417.73 (136.37 points down, a decrease of 1.8052%)

They have approximately 7 weeks to achieve an increase of 1.8052% just to match the year start close, which hardly seems a challenge to me!

6. Has the tide with Technical Indicators Analysis now turned to the positive?

Name Value Implied Action

RSI (14) 34.12 Neutral

STOCH (9,6) 16.47 Buy

STOCHRSI (14) 11.40 Buy

MACD (12,26) -6.27 Buy

ADX (14) 32.32 Neutral

Williams %R -81.58 Buy

CCI (14) -81.14 Neutral

7. W/c Tue 2 Jan 24. The Annual influx of Institutional Monies for Purchases for Retail Investors. More FTSE Tracker Buys = more Barclays Shares bought.

8. Feb 24 ‘run-up’ to Year end Results of Tues 20 Feb 24. Expectations of an Increase to the Dividend and an Increase/Continuation of Share Buy Backs. More reasons for a price increase.

As ever, it’s the three G’s for me. It’s all guesswork, gut feel and good luck in that order. I repeat that I know no more than your neighbours cat, if it could talk. 



Please Make Your Own Choices and Good Luck One and All. 



Regards, MrA

I’d expect the “no change” repetition from the B of E tomorrow.

6 min ago

Stocks gain as Fed Chair Powell begins press conference

Stocks rose Wednesday as Federal Reserve Chair Jerome Powell took to the podium for the post-meeting press conference.

The Dow rose 151 points, or 0.5%. The S&P 500 gained 0.7%. The Nasdaq Composite added 0.9%.

The Fed on Wednesday held interest rates steady, as expected by Wall Street and economists. That marks the central bank's second-straight rate pause, holding the benchmark lending rate at its highest level in 22 years.

Wed 1 Nov 23 US Federal (FOMC) Rate Announcement

Thu 2 Nov 23 UK Bank of England (BOE) Base Rate Announcement

It's the thoughts after the decision being made which normally give a 'clue' as to their 'thinking' and future 'direction of travel'.

Regards, MrA

Good Morning TA1,

Hope all is well?

All the negative news being 'priced in' was part of my decision to 'gamble my lump'. Having read the weekend press in addition to some of the links put on here by other contributors (thank-you one and all) the view that the proposed 'restructuring details to be announced in February 2024' with no details to be shared until then, at best, smells of complete utter Management Naivety. To all others sounds of a statement with no agreed policy in place which translates as Amateurish to most?

Regards, MrA