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Barclays Shares Drop 12% On Abu Dhabi Sale

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Barclays shares drop 12% on Abu Dhabi sale

Why would a billionaire Sheik want to dump UK bank shares? What is that telling you folks?

Because he's just made a couple of billion quid ? And perhaps he's not stupid enough to put it all on red, gold, or oil ? So make your money and take the profit.

or would you keep rolling and making money by regambling your entire stake and winnings till you lost ?

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Barclays shares drop 12% on Abu Dhabi sale

Shares in Barclays fell more than 12 per cent after Sheikh Mansour Bin Zayed al-Nahyan, the owner of Manchester City Football Club and a member of the Abu Dhabi Royal Family, confirmed today that he was selling more than half his investment in the British bank.

Barclays said that Internatonal Petroleum Investment Corporation (Ipic), which the Sheikh chairs, intended to sell mandatorily convertible notes (MCNs) for which it paid £2 billion last October.

Ipic will keep the £1.5 billion of warrants for Barclays shares that it bought at the same time, the bank said.

Shares in Barclays, up 268 per cent over the past three months, dropped 39p to 277.25p on the announcement.

The MCNs, which are paying a coupon of 9.75 per cent, are due to convert to common stock at the end of this month at 153p a share. Barclays’ shares have risen sharply in recent weeks as confidence that the bank would not need to be propped up by the Government grew.

Sheikh Mansour’s holding of MCNs is likely to be sold at a discount to the current Barclays share price, but he has still doubled his investment since buying into the bank last October.

The intervention by the Sheik, which gave Ipic the option to buy a 16.3 per cent stake in the bank, helped Barclays to avoid taking a taxpayer loan.

However, the sale is likely to annoy both retail investors, who were locked out of the capital-raising last year, as well as institutional shareholders that were permitted to buy only £1.5 billion worth of MCNs between them.

At the time Barclays said that it wanted stronger ties to the Middle East as the West went into recession.

John Varley, the chief executive of Barclays, said last night that the bank and Ipic had been able to broaden their strategic and commercial relationship since last year’s investment.

Khadem Al Qubaisi, the managing director of Ipic, said: "The Emirate of Abu Dhabi intends to maintain a close commercial and strategic relationship with Barclays in the future.

"The decision to dispose of some of its interest in Barclays reflects the focus of Ipic's long-term investment strategy on hydrocarbon-related opportunities.".

Why would a billionaire Sheik want to dump UK bank shares? What is that telling you folks?

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Barclays shares drop 12% on Abu Dhabi sale

Why would a billionaire Sheik want to dump UK bank shares? What is that telling you folks?

he had a deal where if the shares went down in value, he would be compensated with more ownership of the bank IIRC.

So the state has been propping up the shares until that contract ended.

now they might well pull out the support and then get the bank for nowt themselves.

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Why would a billionaire Sheik want to dump UK bank shares? What is that telling you folks?

They already answered that.

"The decision to dispose of some of its interest in Barclays reflects the focus of Ipic's long-term investment strategy on hydrocarbon-related opportunities.".

The smart money is heading into commodities, as the recovery fuels the next boom. Oil and other commodities are heading upwards rapidly.

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Its probably nothing more than a straightforward double/halve strategy; we do it in our investment club. As well as a 25% stop loss (which we spectacularly failed to use on Lloyds.............) in theory if any of our investments double, we sell half and reinvest the proceeds elsewhere, to diversify the portfolio.

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They already answered that.

"The decision to dispose of some of its interest in Barclays reflects the focus of Ipic's long-term investment strategy on hydrocarbon-related opportunities.".

The smart money is heading into commodities, as the recovery fuels the next boom. Oil and other commodities are heading upwards rapidly.

Any idea what the effects of higher commodity prices will be for UK house prices ?

Won`t higher commodity prices = higher inflation = higher interest rates ?

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Its probably nothing more than a straightforward double/halve strategy; we do it in our investment club. As well as a 25% stop loss (which we spectacularly failed to use on Lloyds.............) in theory if any of our investments double, we sell half and reinvest the proceeds elsewhere, to diversify the portfolio.

Fact of life. The one you don't use a stop on is the one that collapses completely.

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