Barclays bank shares fall on share stake sale
Barclays bank shares fell by over 10% yesterday as news of a significant share sale circulated round the market. It was revealed that International Petroleum Investment Company (IPIC) sold 1.3 billion Barclays bank shares at £2.67, banking profit of £1.5 billion on shares acquired last year. IPIC was one of the lead investors in Barclays bank multibillion pound fundraising last year which saw a number of Middle East investors acquire a significant numbers of shares at bargain basement prices.
The transaction, which was effectively a means to reduce the UK government influence over the bank, attracted much controversy and many leading investors voted against the move. However, at the time Barclays bank was very much in need of new capital and the £7 billion raised came in very handy at a time when liquidity was low and bad debts started to creep-up.
However, inadvertently the sale of the 1.3 billion shares has alerted many investors and analysts to the fact that the initial recovery stage of the UK banking sector may be coming to a close. Many are now following the lead of the Middle East investor and looking to reduce their stakes in the company which has recovered from lows last year and made substantial progress.
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