As Europe Settles, a Bank Set to Rise

By Covering Business     March 14, 2012

By Peter Vanham
Columbia Journalism School ‘12

After riding a rollercoaster that lasted well over a year, European bank stocks at last seem to have found steady ground with the latest resolution of the Greek debt crisis. Banks’ share prices have recovered on average 20 to 25 percent since September.

The partial stock price recovery went hand-in-hand with hopeful signs the market is starting to trust European governments again. In Italy, for example, the yield on 3-year long government bonds fell to less than 2.5%, down from about 8.0% in November.

For investors ready to embrace Europe’s financial stocks again, Barclays presents an interesting opportunity.

Following the trend in the European banking industry, Barclays lost 60% of its value from February to September of last year because of its high exposure to Italian debt and its ties with the European mainland. Now, the company is likely to follow any positive trend that emerges over the next couple weeks.

Barclays also has a relatively high beta (2.6), which makes it a high-risk, high-yield choice for those looking for a more risky bet over the next couple of weeks.


This article was written for the Columbia Journalism School’s seminar on business journalism in the spring of 2012.


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