Equities Offer Value as Recovery Continues, Barclays Capital Says

"Global Outlook" research forecast maintains a positive near-term view while cautioning on medium-term obstacles to a bull market

Barclays Capital today said in its latest flagship quarterly research publication, Global Outlook: Rebound, But No Raging Bull Market, that the recent market correction, while exposing obstacles to a bull market in the medium term, has not derailed the global economic recovery. As such, Barclays Capital is recommending that investors maintain selective exposure to risky assets, particularly equities in Europe and the US.

"The recent market correction does not in itself pose a serious risk to the continuation of the economic expansion," said Larry Kantor, Head of Research at Barclays Capital. "We think markets will bounce back in the near term, but medium-term issues revealed in the wake of this correction are likely to constrain how far the market rally can go."

Among those issues, which may represent an obstacle to a sustained bull market, are a lack of investor confidence in policy to restore financial market stability, concern over growing government debt and the long-term effects of extreme monetary ease. Nevertheless, "We feel a sustainable global expansion has taken hold and see the market setback as a correction that has restored value in many asset classes, rather than as a threat to economic recovery," said Kantor.

Major themes of Barclays Capital's Global Outlook include:

• Recent market setback has not derailed the global economic recovery
• Sustained bull market may be hampered by investor concern about surging government debt and a lack of confidence in policy to restore financial market stability
• Recommending European and US equities over investment-grade credit
• Extreme selling of European currencies has run its course, and the strength of USD and JPY unlikely to persist
• Environment remains modestly bullish for some commodities, including crude oil

About Barclays Capital's Global Outlook

The Global Outlook research report, published quarterly, provides an assessment of all major economies and outlines the likely implications for global financial markets, including commodities, credit, economics, emerging markets, equities, fixed income and foreign exchange.

About Barclays Capital Research

Barclays Capital is committed to bringing our clients a best-in-class, global research franchise. The firm has a team of approximately 800 professionals covering every major Research discipline, asset class and region. In 2009, Barclays Capital was ranked #1 for Equity Research (for the seventh consecutive year) and #1 for Fixed Income Research (for the tenth consecutive year) by Institutional Investor's All-America Research Poll, ranked #1 for Fixed Income Research by FinanceAsia, tied for #1 among Greenwich Quality Leaders for US Fixed Income Research Quality, was named Best Bank for Credit Research in the Credit Annual Americas Awards, and ranked #1 for Credit Strategy, High Grade Research and Best Index Provider in the Credit Annual European Awards.

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 full spectrum of solutions to their strategic advisory, financing and risk management needs. Barclays Capital has offices around the world, employs over 23,000 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 www.barclayscapital.com.

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Phillippa-Jane Vermoter, [phone]
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Tokyo:
Mariko Hayashibara, [phone]
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