SOURCE: Barclays Capital

December 17, 2008 11:00 ET

Amid Recession, Select Credit Assets Attractive, Says Barclays Capital

Large Risk Premiums in Investment Grade US Credit Assets Could Provide Opportunities

NEW YORK, NY--(Marketwire - December 17, 2008) - Barclays Capital, the investment banking division of Barclays Bank PLC, today said in its latest quarterly research publication, "Global Outlook: Positioning for an Uncertain Recovery," that amid the most severe global recession in decades, the risk/reward trade-off has begun to look attractive in select areas, particularly for some credit assets.

"In this environment, continued caution is required and we suggest high allocations of liquid instruments to take advantage of future opportunities," said Larry Kantor, Head of Research at Barclays Capital. "However, with assets already priced for severe economic weakness and a new US administration coming that seems determined to take decisive action, we do recommend some modest risk positions. Investment grade US credit assets appear attractive; they are already trading at spread levels close to highs reached in the Great Depression, and would likely lead any market rally."

Major themes of Barclays Capital's Economic and Financial Market Outlook include:

--  The global economic contraction will find a bottom around mid-year
    2009, but the recovery will be well below par. Barclays Capital is not
    expecting sustained deflation.
--  Opportunities exist in US investment grade credit, where there are
    large risk and liquidity premiums.
--  Equities in major markets do not appear as cheap as credit
    instruments, but Barclays Capital favours modest positions in Europe over
    the US.
--  Underweighting recommended for both equity and non-investment grade
    credit in emerging markets.
--  OPEC production cuts may soon lend support to oil prices, but similar
    supply management is not expected to benefit other commodities in the near

This research publication, published quarterly, provides an assessment of all the major economies and spells out the likely implications for global financial markets, including commodities, credit, economics, emerging markets, fixed income and foreign exchange.

About Barclays Capital

Barclays Capital is the investment banking division of Barclays Bank PLC. With a distinctive business model, Barclays Capital provides large corporate, government and institutional clients with a comprehensive set of solutions to their strategic advisory, financing and risk management needs. Barclays Capital has offices around the world, employs over 20,000 people and has the global reach, advisory services and distribution power to meet the needs of issuers and investors worldwide. For further information about Barclays Capital, please visit our website

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