Trader Talk

Have Big Investors Changed Their Minds About Banks?


Financials are again lagging the overall market...and Barclays is one of the main reasons.

After holding a stake for only 7 months, an investment firm controlled by the Abu Dhabi royal family has sold a huge stake in a handsome profit.

The firm sold 1.3 billion shares, reducing its ownership exposure in Barclays from about 16 percent to about 6 percent, a sale of about 60 percent of its investment.

The good news is that the market has absorbed a huge sale of bank stock at about the same time that it absorbed a big swath of secondary offerings from American Express, Morgan Stanley, and JP Morgan.

The bad news is...weren't the overseas investors supposed to be long-term investors? They've only had the investment 7 months, and now they are out.

Is this a change in attitude on the part of the big investors?

Qatar and Challenger also hold big stakes in Barclay, but the question applies to all big investors in all the mulitnational banks.

Societe Generale, in a note this morning to investors, summed up the sentiment on the Street: "a strategic long-term investor attempting to divest circa 61% of its potential holding...this quickly should not be taken as a positive sign."

Meantime, of the three U.S. banks that raised capital today, only Morgan Stanley is trading above the price of its secondary. 




Questions?  Comments?