It stirs the imagination with the news that this most British of banking institutions is selling off its precious metals vaulting business to China’s ICBC Standard Bank as part of a downsize in operations.
While this may not be a big part of the Barclays balance sheet, it could be taken by equity investors as yet another reason to sidestep the business, still reeling from post-crisis regulatory restrictions and record fines for its part in the forex scandal.
A look at Barclays poor share performance in recent months and, coupled with a dividend cut, it’s hard to make a case for its recovery.
However, that’s exactly what some savvy UK equity names are doing right now, and it ties in with the big story of 2016 so far – the supposed move back into ‘value’ plays.
Shouting loudest is Old Mutual Global Investors CEO Richard Buxton who has in recent weeks been pointing out Barclays merits, in particular its price against another FTSE 100 stalwart British American Tobacco.
“Our current favourite slide at the moment on the desk is the British American Tobacco share price relative to the Barclays share price and, clearly, that reached an extreme during the financial crisis in favour of British American Tobacco – it reversed significantly,” he says.
“It had another strong move upwards in favour of BATs during the eurozone crisis in ’11 and now, year-to-date, it is up at levels that are almost akin to the worst of the financial crisis.”
