Qatar sovereign wealth fund sells half of Barclays stake

Qatar's sovereign wealth fund, Barclays Bank's largest shareholder, is selling half of its stake in the bank worth over £1.3-billion to profit from the bank's rising share price.

Qatar Holdings, the investment arm of the Qatar sovereign wealth fund today said that it is selling 379.2 million shares of Barclays by paying £750 million to the bank for exercising warrants at 197.775 pence to sell the stock at 382.05 pence to raise approximately £1.4 billion, earning a net gain of £650 million.

Despite reducing its stake in the group, Qatar sovereign fund will still remain the largest shareholder in Barclays, which the Canary Wharf-based bank had tapped in October 2008 to secure capital injection during the midst of the global financial crisis after it spurned the UK government's bailout. (See: Barclays shuns UK bailout loan in favour of Middle East money)

It is the second time this year that Qatar Holdings is selling its stake in Barclays. In April it reduced its holding from 6.4 per cent to 5.8 per cent after selling 35 million shares.

In June, Sheikh Mansour bin Zayed al-Nahyan, member of the Abu Dhabi ruling family, made a whopping profit of 70 per cent or more than £3.5 billion on an investment of £2 billion in just seven months, when he sold more than 1.3 billion shares of Barclays. (See: Abu Dhabi investor to sell Barclay's stake with windfall profits)

Barclays' share price was as low as 55 pence in March, but has been on the upward move since it refused the stiff terms accompanying the UK government bailout and has since risen to 382.05 pence but fell by 4.8 per cent to 363 pence after the announcement of the share sale by Qatar holding today.

Ahmad al-Sayed, chief executive of Qatar Holding, said: "The decision to exercise the warrants and dispose of the resultant shares forms part of Qatar Holding's portfolio management programme and does not impact on our current intention to remain a long-term strategic shareholder in Barclays."

''We are happy to be working with Qatar Holding on a placing derived from the exercise of some 50 per cent of its warrants,'' said John Varley, Group CEO of Barclays. ''The effect will be further to broaden the base of our share register.