Legal and General excel, Barclays cause me a headache…

Posted: August 6, 2013 in Barclays, Companies, Legal and General, Watchlist

Another one of my portfolio heroes at the moment is (LGEN:LN) and todays excellent RNS announcement regarding H1 operating results has given it a further push, in fact the share is now up and over the £2 mark. And in light of the fact that the RNS also mentioned that the dividend has taken a 22% upward hike it has helped make up my mind, to not bank any profits just yet.

As the saying goes though, “what Financial God giveth with one hand, thou taketh away with the other”. Indeed Barclays (BARC:LN)  is posing a dilemma for me at the moment with its proposed shares issue.  I am torn between taking up the offer, or selling out now and banking the profits.


(1).  I take part in the rights issue, and dilute myself by 25% over the remaining shares, partly off-setting the gain of getting the issue at 40% discount.

(2).  I crystallize (love that word) the profits now and protect the capital from unknown (unknown to me at least) impact of this issue later down the road.

The problem is that by selling and releasing the capital (crystallizing the profit)  I will need to redeploy it sooner than I hoped, because it is held within an ISA, and under current rules cash can’t be held in those for very long.

So if I choose to do (2). I am faced with;

(3) Ploughing a capital amount equivalent to around 22% of my portfolio’s total value into a new share from my watchlist, just a short while after making a double purchase already.

I am going to reserve final judgement until after I read the Rights Issue Prospectus, but I am starting to errr (is that a word) towards (1). And playing the long game. 

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