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Barclay’s share prices fall amidst rumours

November 10, 2007 by admin  
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Barclays Bank, one of the UK’s high street banking giants, has seen its share prices plummet to their lowest level in two and a half years.

uk currencyIt is thought that the fall in share prices could be partly due to rumours that the bank has experienced financial problems in light of the recent credit crunch that has swept across the UK. Rumours were sparked back in August when the bank took out two overnight loans from the Bank of England, which was blamed on ‘technical’ problems.

Share prices tumbled by 8% at one point, taking them to 524.5 pence. This was followed by a slight recovery, with share prices at 537.5 at closing, which was a drop of 5.9%. Barclays has denied having any funding problems following the emergency loans. In fact, in order to try and restore consumer confidence the bank’s head of global retail and commercial banking, Frits Seegers, purchased £700,000 worth of Barclay’s shares on Friday.

Ian Poulter at Landsbanki Financials stated: “There are concerns about writedowns and everything else, but the comments Barclays have made to date suggest that is not an issue, as does the fact they are still buying back their own shares.”

The thirty month low in share prices comes just shortly after the crisis that hit Northern Rock, where share prices plummeted by over 80% after it became widely known that the bank had taken an emergency loan from the Bank of England. This fuelled speculation that the bank was on the verge of collapse, and over £2 billion in savings was also withdrawn in addition to a huge tumble in share prices.

Tom Smith
10th November 2007

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