Barclays, RBS and HSBC plunge as FTSE stands strong

Barclays shares plunged 7.2 percent to 166p on this mornings trade as Merrill Lynch estimated that the deal of raising capital privately could cost investors £3.2 billion. The announcement that Barclays are raising funds from investors in Qatar and Abu Dhabi of £7 billion sent the shares tumbling 19 percent since the deal was unveiled on Friday.

Analysts Merrill Lynch said in a note: “We calculate that Barclays’ decision not to raise capital from the UK government may have cost shareholders a potential 3.2 billion pounds”. This is due to the longer duration of the interest fees and payments, the cost of new warrants and the absence of a claw back on convertible shares.

Barclays shares were cut from 235p to 204p by Merrill Lynch. Deutsche Bank cuts its target from 310p to 290p and USB cuts its target from 220p to 270p.

Joining Barclays decline was RBS dropping 1.5p to 66p and HSBC falling 28.5p or 4 percent to 733.5p although the FTSE-100 index has taken the bank slumps in its stride opening on Monday up 18.5 points at 4395.8.

Source: reuters