Post-holiday volume still subdued in preferred arena; ING gains as ECB cuts interest rates

By Stephanie N. Rotondo

Phoenix, July 5 - Preferred stocks were firming Thursday, though volume was "relatively light" due to many players still being away from their desks, according to a trader.

"Everything is moving up," he said.

The European Central Bank announced Thursday that it cut its key interest rate to 0.75% in an effort to boost the European economy.

The central bank also said it lowered the interest rate it pays banks on overnight deposits to zero, an effort designed to spur lending.

If the ECB continues these actions, a trader said, "it should start making foreign preferreds more attractive."

However, there wasn't much of a pop Thursday in such names, he said, though ING Groep NV was performing well.

Among other foreign banks, Barclays plc was on the decline following an outlook change from both Moody's Investors Service and Standard & Poor's.

The alterations came amid a Libor-rigging scandal that has seen three top executives resign from Barclays.

ING heads higher

ING Groep's preferreds were moving higher following a interest-rate cut from the ECB on Thursday.

The 7.375% perpetual hybrid capital securities (NYSE: IDG) moved up 15 cents to $24.43, while the 6.375% perpetual hybrid capital securities (NYSE: ISF) rose 21 cents to $21.62.

ING is based in Amsterdam.

Barclays weighed down

Barclays' preferreds remained weak as the bank and investors deal with a Libor-rigging scandal that has placed the U.K.-based institution under government scrutiny.

The 8.125% series 5 noncumulative callable dollar preference shares (NYSE: BCSPD) dropped a dime to $25.51. The 7.1% series 3 noncumulative callable dollar preference shares (NYSE: BCSPA) meantime lost 3 cents, ending at $24.80.

On Thursday, both Moody's and S&P cut their outlooks on Barclays to negative from stable. The bank's actual ratings were affirmed.

Also on Thursday, British lawmakers voted to create a parliamentary committee that will investigate the bank and the industry as a whole amid the interest rate scandal.

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