Barclays May Raise Capital, UK Stocks Down

123jump.com Staff
16 Jun, 2008
New York City

UK stocks edged lower after crude oil prices raced to another record intra-day price on a small fire in the North Sea oil field. The persistent weakness in the U.S. dollar lifted the crude oil prices higher. Home builders rose after several institutional investors showed an interest in building a framework to inject more capital in the home builders.

[R]1:00AM New York, 5:00PM London - Rising oil prices dampen stock indexes in London. Barclays considers issuing new shares.[/R]

London market averages plummeted as increasing oil prices raised the specter of mounting inflationary pressures.

Market sentiment

In London trading FTSE 100 stocks fell 0.14% or 8.2 at 5.794.60. Of the FTSE 100 stocks 38 gained, 62 declined, and 2 were unchanged. Eurasian Natural led advancers in the index shares with a rise of 6.28% followed by Anglo America rising 4.64% as crude oil prices jumped to record highs.

Oil rises to record $140 per barrel

The crude oil prices rose to a record $140 per barrel after the dollar slumped and disruptions hit the North Sea oil production. The Norwegian oil company StatoilHydro said it has shut down 150,000 barrels per day production at its Oseberg high quality oil field after a fire broke out at its platform on Sunday. Since then the production has resumed after nine hours of interruptions.

Investors to inject cash into housebuilding sector

The Sunday Telegraph reported yesterday on its website that Britain''s largest institutional investors are developing a framework to inject cash into the house building sector.

Worries have heightened over the future of the industry and the Home Builders Federation has since proposed measures such as a stamp duty holiday and interest rate cuts.

Darling to engage City over short selling rules

The Financial Times reported that UK’s Chancellor of the Exchequer Alistair Darling will this week seek to engage the City over the stringent rules on short selling that were announced on Friday last week.

The Financial Services Agency said last week it is now imperative for short sellers to disclose their short positions in stocks undergoing rights issues if they are more than 0.25% of total shares outstanding. The exchequer Darling is likely to set up a small working group with leaders of the financial services companies to discuss ways to promote the financial sector in London and review issues related to short selling and short sellers.

Gainers & Losers

Eurasian Natural led advancers in the FTSE 100 index shares with a rise of 6.3% followed by increases in Anglo America of 4.6%, in Barclays Plc of 3.46%, in Home Retail Group of 3.42%, and Antofagasta of 3.33%.

Energy stocks rose after crude oil prices leapt to $140 per barrel. Tullow Oil also gained 1.35%. Persimmon advanced 2.37% and British land Co. increased 1.76%.

British Airways led advancers in the FTSE 100 index shares with a fall of 4.49% followed by losses in SABMiller of 4.06%, in Unilever Plc of 2.92%, in Cadbury Plc of 2.90%, and Compass Group of 2.64%.

British Airways rose as oil prices rose to record highs, raising fears that this may hurt profits.

Financial stocks dropped as well. Standard Life shed 2.27%, Lloyds TSB Group declined 2.2% and HBOS Plc fell 1.79%.

Barclays considers issuing new equity

Barclays Plc reported today on its website that the board is presently considering the issue of equity through rights offering.

“In respect of current trading, Barclays Group profit before tax in May was well ahead of the monthly run rate for 2007. Relative to May 2007, global retail and commercial banking continued to deliver strong growth in profits and in Investment Banking and investment management profits were in line,” said the bank in a statement.