Market Report: Share buy-back fails to prop up ailing Barclays

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The Independent Online

With the market lurching from one crisis to another, companies continue to buy back their own shares in record amounts. Barclays clearly sees some value in its own stock – the struggling bank bought back 2 million shares yesterday before Tuesday's trading statement.

The statement is eagerly anticipated – or dreaded – depending on your point of view. But despite the bank confirming that its exposure to sub-prime lend-ing is far lower than some rumours have suggested, there seems to be no enthusiasm for the stock even at levels not seen for more than 36 months. The stock is now yielding more than 5.5 per cent, more than it pays most of its savers in interest, but with Northern Rock continuing its spectacular fall, down another 12.2p at 84.8p, Barclays looks to be alone in thinking its shares are worth buying. The stock closed 26.5p worse at 490p.

Other financials were among the heaviest fallers after a grim day for global equities. Schroders fell by almost 8 per cent, down 107p at 1,313p, as investors cashed in on what has been one of the best-performing stocks in the sector over the last six months. Icap was also lower, despite Tuesday's storming results and the fact that it performs best in volatile conditions, giving up 28p to 617p.

Oil provided the only port in the storm, as the price nudged ever closer to $100 a barrel. BG Group topped a very short list of blue-chip risers, adding 24p to 996p, while Shell also found support to close up by 35p at 2,003p after confirming a $410m investment in Regal Petroleum. BP attempted to follow up on the decent sessions enjoyed by BG and Shell, but a late sell-off resulted in its shares declining by 2.5p to close at 577.5p.

With only four blue-chip stocks closing the session higher the market was deeply in negative territory all day, and with Wall Street rapidly following in the same direction London shares stood little chance of a rally. With major sectors including banks, mining and property all facing severe selling pressure, hiding places were few and far between, and the FTSE 100 closed 155.6 worse at 6,070.9.

Shares in the beleaguered buy-to-let mortgage lender Paragon were in the red once more after Tuesday's grim financing news. Trad-ers are convinced that a discounted rights issue is on the way if the company is not to close its doors to new business. By the close the stock was trading at just 80p, 45p worse, having fallen below 100p for the first time earlier in the day.

The property sector's rollercoaster week continued as influential broker Merrill Lynch reviewed some of its ratings, resulting in "sell" advice on Mapeley, Warner Estates, Town Centre and Mucklow. The broker cited secondary assets, high gearing and development risks for the sweeping downgrade, although it did note that it sees better value in the larger cap stocks. Mapeley was hardest hit, falling 176p to 1,320p, with Warner Estates off 37.5p at 437p, Town Centre down 44p at 339p and Mucklow off 8.5p at 330p.

The FTSE 250 leaderboard was dominated by natural-resource stocks as metal and oil prices ticked up towards breakthrough levels. Hochschild Mining surged 29.5p to 468p, while oil service provider Wood Group benefited from some vague bid talk to post a 4.5p gain to 396.25p, although the dreary start to trading on Wall Street subdued investors' appetites in the afternoon.

A decent trading statement from Win Group, the mobile data provider, was not enough to offset some bad news on costs. The company told investors that investment in personnel will lead to higher costs in the short term, sending the shares 22p lower to close at 155.5p, a fall of just over 14 per cent.

Blinkx, the online video group, was also in the black despite confirming a deal with Killinger to host its library of reports by financial experts. Blinkx, which demerged from Autonomy in May, has had a rotten start to life as a listed company and yesterday's 2.25p fall to 17.75p means that investors have lost more than 70 per cent of their money since the shares came to the market.

An exclusive television licence deal with the BBC has been a boon for cash transactions processor PayPoint. Interim results showed a 51 per cent jump in transaction value, leading to a 32 per cent jump in interim profits. Broker Dresdner Kleinwort reiterated its bullish guidance on the stock with an unchanged price target of 745p. The shares closed 25p better at 593.5p.

Finally, with the price of gold topping $800 an ounce, Centamin Egypt chose a good day to give investors a bullish drilling update. New evidence confirms that the company's Sukari project in eastern Egypt contains another high-quality gold seam, and the shares rallied another 1.5p to 62.25p – more than double the level the shares were trading at in January.

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