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Could it be an early April Fool's joke? Is Credit Suisse on a wind-up, or does it know something the rest of the City doesn't? The broker set tongues wagging today by jacking up its target for Barclays from 110p to 170p. Oh, and just so you know, Credit Suisse is the house broker to...Barclays.
The struggling High Street lender responded with a jump of 13.5p to 136.9p, after touching 150.1p, as more than 85 million shares changed hands. It suggests the bears are feeling the squeeze and struggling to cover the positions in a market short of stock.
One trader chortled: "They must be off their trolleys round at Credit Suisse". But all agreed that in these volatile markets, anything can happen.
Credit Suisse remained unrepentant, saying it has based its move on the capital gain of £4 billion Barclays is expected to accrue from the proposed sale of iShares, its fast-growing asset management business.
Credit Suisse has also awarded Barclays an outperform rating, although close scrutiny of the shares shows they have started to show the bears a clean pair of heels in recent weeks. After hitting a record low of 51.2p at the start of the year, they have proved to be a volatile market. Since the start of this month alone, they have rallied from 87p. Dealers say further improvement in the shares may be difficult to achieve.
Morgan Stanley last week slashed its target for Barclays from 145p to just 90p, and Panmure Gordon earlier this month lowered its sights from 55p to 40p with a forecast of big losses.
The move by Barclays provided encouragement for some other banks. State-owned Lloyds Banking Group added 4.9p at 66.7p while Royal Bank of Scotland firmed 0.6p to 25.4p. Meanwhile, City traders and fund managers face an uphill battle over the next few days to put a gloss on things before the final quarter draws to a close.
That is when they will begin the task of assessing and justifying their performances to clients. It's not just bonuses at stake this time but also the ability to hold on to those cherished clients and their cash, who may now choose to switch their money elsewhere in the search for better value.
Most traders will be looking to embark on a spot of window-dressing between now and next Tuesday, by chasing the stock market up to around 4000. But it could turn out to be hard work, with good news thin on the ground.Shares made modest progress, having traded within a narrow band for much of the session. The FTSE 100 rose 8.27 to 3908.52.
There is evidence the US was even weaker at the end of 2008 than previously thought after the GDP figure was revised down to 6.2% from 6.3%. Corporate profits were off by a quarter but Wall Street this afternoon still managed to extend yesterday's gains, the Dow rising 83.08 to 7832.89.
Mining shares supported the charge with Eurasian Natural Resources adding 47¾p at 458¼p after positive comments from Bank of America Merrill Lynch. The broker has raised its rating from neutral to buy and lifted its target from 400p to 700p. It says the outlook for chrome, ENRC's main product, is clearly depressed but now largely discounted in the share price.
Other miners to go better included Kazakhmys, up 30¼p at 393½p, and Rio Tinto, 125p dearer at 2344p.
Collins Stewart likes Premier Oil's proposed acquisition of Oilexco's North Sea Assets for £348 million, saying the deal could transform Premier's growth opportunities and lift production by 40% to 50,000 barrels of oil a day. It has repeated its buy rating on the shares, up 33p at 1088p, and raised its target from 1050p to 1350p.
On the junior Plus market, directors of Rivington Street Holdings rushed out a statement saying they know of no reason for the recent fall in the share price, other than a small number of share sales. They added that the company is trading profitably. The shares rallied 3p to 30½p, having dropped from 37½p since last week.
Reader views (2)
Credit Suisse London has repossessed properties/assets and hide the depreciated assets in companies owned by third parties. An Officer of the bank also demanded under-the-table money before influencing the bank to approve the loan. Something is not right with the bank.
- Grace Song, Munich, Germany, 03/04/2009 07:43
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There is no good reason for the Barclays share price to be as low as it is today. The market assumption has been that because Barclays is a bank, it must be as poor as the rest. It hasnt been, it isnt, and wont be due to more robust risk management systems.
This assumption rears its head just before profit announcements every year, and every year, Barclays profits prove the market wrong.
When is this pattern going to be picked up by the market? Wakey wakey.
- Dave Davies, Basingstoke, Hants, 26/03/2009 17:49
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