![]() ETF investors who are looking to go bottom fishing with ITB might keep an eye on the 200 day moving average as an entry and exit point.Īlso in housing- related ETF news, Barclays launched five new iShare real estate ETFs on the New York Stock Exchange. Stricter lending reduced the pool of buyers and even if they kept the standards the same, there wouldn't be a decent recovery, mostly because home prices accelerated faster then incomes during the boom. ![]() Maya Roney for BusinessWeek reports soft home sales are likely to continue through May, a time when home sales are traditionally the highest. And, iShares Dow Jones US Home Construction ( ITB) is the worst performing ETF year-to-date.Īt -13.7%, do not look for a rebound anytime soon. Both banks used preference shares paying 7 per cent interest to cover the fee.īarclays will probably seek guarantees on 20 billion to £81 billion of assets, according to analysts surveyed by Bloomberg.The latest numbers show 2007 going down as one of the worst years for housing in decades. RBS paid £6.5 billion, or 2 per cent, to protect £325 billion of assets. Lloyds paid £15.6 billion for state guarantees on £260 billion of risky investments, or 5.2 per cent of the assets. If Barclays raises the participation fee for the asset protection plan by selling iShares, that would be “positive.” “In these markets you have to be realistic about the affordability and the funding” for any potential purchaser of iShares, said Mike Trippitt, an analyst at Oriel Securities in London. The London-based Sunday Telegraph on Sunday said the unit could be sold for as much as £5 billion, without saying where it got the information. That indicates iShares may be worth less than £2 billion. The iShares unit probably made about 25 per cent of BGI’s profit last year, or £110 million, and may be valued on an earnings multiple in the “mid-teens,” Potter said. “They have to get some capital as the world has changed,” said Simon Maughan, an analyst at MF Global Securities Ltd who has a “sell” rating on Barclays stock.īarclays Global Investors had $1.5 trillion (£1.04 trillion) of funds under management at the end of 2008, including £226 billion at iShares. By comparison, Barclays’s ratio was 6.7 per cent at the end 2008. Since then, Lloyds said its core Tier 1 capital ratio - a measure of financial strength - will increase to 14.5 per cent through the asset protection program, and RBS estimated its ratio will jump to 12.4 per cent. In January, the bank said it wouldn’t need government funding because of record revenue from Barclays Global Investors and the acquisition of Lehman Brothers Holdings Inc’s North American unit. Participation will be based on the “economic merits” to shareholders, Barclays said. The bank on Monday said it had begun talks with the Treasury about taking part in the asset protection programme. “Tough markets evidently lead to tough decisions being taken.”īarclays rose 15.4 pence to 89.5 pence as of 10.47 am in London trading after it joined banks such as Citigroup Inc, Deutsche Bank AG and Bank of America Inc in announcing strong earnings for the first two months of the year. The sale talks are a “surprise as management had indicated this business as being core to the group for several years now,” said Potter, who has a “hold” rating on the stock, in a note to investors. Barclays will only enter the program if it can pay the fees in cash and avoid giving a stake to the government, according to five analysts surveyed by Bloomberg News. iShares may be valued at $2.84 billion (£2 billion) based on its earnings and other similar deals, estimated Alex Potter, an analyst at Collins Stewart Plc.īarclays is exploring the sale of iShares after Royal Bank of Scotland Plc and Lloyds Banking Group Plc boosted their capital through a state asset insurance program that allowed the government to increase its holdings in each bank to as much as 75 per cent. Will probably seek guarantees on £20-81 billion of assets.īarclays Plc is in talks to sell its iShares exchange-traded funds unit as the UK’s third- biggest bank tries to bolster capital without turning over a stake to the government.īarclays rose as much as 22 per cent after the London-based bank disclosed the negotiations and said it has had a “strong start” to 2009.
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