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Why Jupiter's de Blonay has been buying Barclays
by Amy Williams on Jul 09, 2012 at 13:56
Jupiter's Guy de Blonay has been backing Barclays on the belief too much bad news has been priced into shares on the back of the Libor scandal.
‘A bounce will probably come as the shares are too undervalued in my view – people are already pricing in a lot of bad news,’ the manager said, speaking exclusively to Citywire.
On top of this, de Blonay said the shares in the bank are also depressed due to a vacuum within its senior management, and clarity on this would be another positive.
‘The CEO has left, the COO has left and the outgoing chairman has to still find a successor, but once we can narrow it down to someone who is willing to take on the job and put together a decent strategy for the bank, we will probably get some relief.
‘Remember when Lloyds got its new chief executive the shares rallied quite strongly on the day and the day after the announcement,’ de Blonay said.
However, the manager accepts that this is a problem which will not disappear overnight for banks as rigging was probably widespread across the sector.
He said: ‘In the short term we could have some relief in the fact that the market is being overly pessimistic on the prospect of future litigation simply because it is more likely than not that there was Libor manipulation, they (Barclays) were not alone and so the guilt has to be shared among several banks,' he said.
‘It’s going to be really difficult to prove so we have to talk about an alleged Libor manipulation. The consensus believe that it was a widespread practice but it still needs to be proven and I think even if you speculate on some settlement or number it won’t come out, it will take years to reach some sort of a settlement.’
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