UK Stocks Rise, Barclays

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

London stocks rose marginally driven by financial stocks after Barclays announced a rights issue to boost its capital base from investors including Qatar Investment Authority, China Development and Sumitomo Mitsui Banking Corp. In addition, retailers gained as Qatar Investment Authority upped its stake in Sainsbury to 25.3%.

[R]1:00PM New York, 6:00PM - Barclays to raise £4.5 billion through issue of rights shares. Qatar Investment Authority shores up stake in Sainsbury to 25.3%

London stocks rose marginally driven by financial stocks after Barclays announced a rights issue to boost its capital base from investors including Qatar Investment Authority, China Development and Sumitomo Mitsui Banking Corp.

Similarly, retailers gained as Qatar Investment Authority upped its stake in Sainsbury to 25.3%.

Losses in energy stocks however pared gains.

Market sentiment

In London trading FTSE 100 rose 0.56% or 31.4 at 5,666.10.

Of the 102 FTSE 100 stocks 73 gained and 29 declined. London Stock Exchange led advancers in the index shares with a rise of 14.08% followed by British Airways advancing 8.53% on retreating oil prices.

Barclays to raise £4.5 billion through shares issue

Barclays Plc announced a stock offering plan to raise £4.5 billion through the issue of 1,576 million new shares to boost its capital base and increase capital ratios ahead of it’s targets.

The bank notes that £0.5 billion will be raised through a 169 million new shares at 296 pence, which represents a discount of 4.7% to Barclays closing price on June 24.

Also £4 billion will be raised through a placing and open offer of 1,407 million new shares at 282 pence per new ordinary share, which is a discount of 9.3% to Barclays closing price on 24 June 2008.

Qatar Investment Authority and Challenger, a partnership between Temasek and Qatar have agreed to invest up to £1.76 billion and £533 million respectively and Sumitomo Mitsui Banking Corp. has agreed to invest £500 million.

Similarly, China Development has agreed to invest to £136 million and Sigapore sovereign wealth fund Temasek has agreed to invest up to £200 million.

Gainers & Losers

London Stock Exchange led advancers in the FTSE 100 index shares with a rise of 14.08% followed by increases in British Airways of 8.53%, in Next Plc of 7.03%, in Barclays Plc of 6.52%, and HBOS Plc of 6.28%.

British Airways increased as oil prices fell below $137 a barrel.

Retailers gained as Qatar Investment Authority shored its stake in J Sainsbury to 25.3% by buying 7 million shares. Kingfisher spiked 5.87%, Marks & Spencer increased 5.26%, Tesco gained 4.35% and Sainsbury surged 4.21%.

Financial stocks also rose on news that Barclays will embark on a share issue to raise £4.5 billion. Standard Chartered jumped 5.09% and Royal Bank of Scotland edged up 4.56%.

Eurasian Natural led decliners in the FTSE 100 index shares with a fall of 4.96% followed by losses in United Utilities of 4.36%, in Anglo America Plc of 4.12%, in Xstrata Plc of 4.02%, and Cairn Energy of 3.34%.

Commodity stocks dropped as crude oil prices plunged below $137 a barrel. Nymex August West Texas Intermediate fell 33 cents to $136.67 a barrel while ICE August Brent lost 7 cents at $136.39 a barrel.

Gold fell as well. BHP Billiton shed 3.19%, Rio Tinto slipped 2.50%, Kazakhmys Plc slumped 2.43% and Tullow Oil plummeted 1.15%.