London shares closed lower on Monday as shares in Barclays plunged after its key shareholder Qatar sold warrants on the troubled bank.
The benchmark FTSE 100 index sank 32.42 points or 0.56 percent to close at 5,786.72.
Barclays shed 5.39 percent to 240.50 pence as Qatar Holding, an investment arm of the wealthy Gulf state, said it has cashed its remaining holding of Barclays warrants without affecting its status as the British bank’s top shareholder.
The sovereign wealth fund said it has “monetised its remaining holding of 379 million units of Barclays Plc warrants as part of its active portfolio management,” according to a statement.
“QH’s investment in Barclays ordinary shares is unaffected by this transaction,” remaining the largest single investor with an “unchanged 6.65 percent” stake, the fund said.
Barclays revealed in August that the Serious Fraud Office was probing payments made to Qatar Holding, which it tapped for funds at the height of the 2008 global financial crisis to avoid part-nationalisation.
“Qatar Holding have exercised their warrants into stock — long-term option contracts — in Barclays, which they got their hands on at the height of the banking crisis, and offloaded the stock,” said TJ Markets analyst Manoj Ladwa.
“They still remain holders of their core position and seem to be taking a significant profit out of the trade.”
Investors in London were also unnerved by anxiety about a meeting of eurozone finance ministers to discuss the release of the next slice of Greece’s bailout cash, dealers said.
“The markets are expecting European finance ministers to announce that the latest aid package to Greece has been approved,” said Shavaz Dhalla, a trader at Spreadex.
“However, if a lack of agreement is not achieved today, which would be the third meeting this month where a repayment plan for Greece could not be agreed, investor?s patience could finally give in,” he said.
The London market welcomed news of the appointment of Bank of Canada chief Mark Carney as next governor of the Bank of England, though analysts said the announcement was a surprise both in Britain and Canada.
“Mr Carney offers a strong posutive career background mix with major experience both within and outside a central bank,” said Howard Archer of IHS Global Insight.
“Much attention will focus on whether the Bank of England is likely to follow tighter monetary policy under Mr. Carney than under Sir Mervyn King,” Archer said.
Katja Hall, chief policy director of the Confederation of British Industry, said: ?His strong track record as the Canadian central bank governor and extensive experience in international financial regulation mean that he is well positioned to guide Britain through challenging economic times.”
Other banks were swept along with the fall in Barclays shares. Royal Bank of Scotland lost 3.03 percent to 285.10 pence and similarly state-rescued rival Lloyds dropped 2.81 percent to 45.10 pence.
On the currency markets, the pound fell to $1.6018 at 5:22 pm from $1.6049 late on Friday and edged lower to 1.2352 euros from 1.2363 euros before the weekend.
London shares drop as Qatar sells Barclays warrants
