Broker snap: Barclays downgraded on rights issue concerns
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Merrill Lynch has lowered its rating on Barclays to 'neutral' from 'buy', saying the bank is likely to need additional funding after its peer Royal Bank of Scotland sparked right issue concerns last week.
Even if Barclays does not announce significant write downs or capital raising, investors are likely to consider the bank guilty until innocent for some time, Merrill said.
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However, the broker also noted that Barclays' share price has outperformed the sector this year, falling only 5% compared with a decline of 14% for the European banking sector as a whole.
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