Thoughts on Barclays Today

Barclays seems to have been the centre of discussion on Tuesday as it announced full year profits of £11.6bn. This equated to a 92% increase from last year. So you're probably sitting there thinking how is this all possible with many banks on the brink of collaps last year. Well, half of this figure was achieved through the sell off of its BGI fund managment arm to Blackrock last year. Even when you take this figure away profits still look impressive, with a £4 billion increase compared to 2008. Now in a time when banks are being shunned by investors Barclays seems to have lifted spirits and to some extent confidence that the banking sector can be profitable.

Now before you go out and rush into Barclays it is important to note that we are not yet through this economic crisis yet. The cut backs in public spending and job losses have not been felt yet. This coupled with the rising cost of living through inflation will mean the economy is going to have a few more hurdles before we can say it is out of the woods. Therefore as you will notice despite getting a number of buy recommendations there are a few brokers who are still neutral on Barclays and in my opinion rightly so. My feeling is that if you bought in prior to the announcment of results you've probably made your money. Now the price has moved about 20p above its simple moving avergae (SMA) (Jan-Feb) of around 280p. Now this is sometimes a signal of a price increase and a move onto a higher price resistance. At the same time i feel that bad economic news isn't going to sustain any price increase in fanancials. Id wait until we see the full extent of job losses and economic cut backs before investing here.

Broker Recommendations Today

Company	Old Target (current price)	New Target	Broker (s)
Dominoes	_	337.5p	WH Ireland
Daily Mail	_	buy	Barclays
General Trust	_	453.3p	Barclays
Barclays	_	Netural Buy	Goldman Sachs Nomura
Trinity Mirror	_	140.2p	JP Morgon
legal and General	_	76.45p	Shore Capital
Imagination Tech	_	buy	Seymour Pierce
United Utilities	565p	575p	UBS
Pennon Group	_	545p	UBS
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