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Barclays shares frozen after 9.1% drop

Trading in shares of Barclays, the third-biggest bank in Britain, were temporarily suspended yesterday after their price dropped by more than 9 percent.

Dealers said the stock price tumbled on rumors that the group was to announce large-scale write-downs to its assets owing to the global credit squeeze caused by the US home loan crisis.

Barclays shares shed 9.1 percent to ?4.42 (US$9.27) in morning London trade as speculation concerning the bank swept across trading floors.

At midday Barclays shares stood at ?4.54, down 6.63 percent.

Traders said the decline reflected rumors that like US banking giant Citigroup, Barclays would imminently confirm it had sustained heavy investment losses as a result of the sub-prime mortgage crisis and subsequent global credit freeze.

A Barclays spokesman said there was "absolutely no substance" to the rumors.

A company spokeswoman said the bank's shares were automatically suspended for about five minutes.

Some analysts were skeptical about the speculation.

"I think Barclays will make their [earnings] numbers. Obviously the market disagrees with me and there are a lot of people taking out short positions [selling], but I think they're going to find themselves on the wrong end of a hiding," said Magnus Mathewson at stockbroker Hichens, Harrison.
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