STOCKS NEWS EUROPE-Barclays sags on cost of capital concern

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09:00GMT 03Nov2008-Barclays sags on cost of capital concern

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Barclays (BARC.L) shares sag 7.2 percent to 166 pence on concern that raising capital privately is too expensive and dilutive, with analysts at Merrill Lynch estimating the fundraising may cost investors 3.2 billion pounds.

Barclays is raising 7 billion pounds, mostly from investors in Abu Dhabi and Qatar, and its shares are now down 19 percent since the plan was unveiled on Friday.

"We calculate that Barclays' decision not to raise capital from the UK government may have cost shareholders a potential 3.2 billion pounds," Merrill says in a note, citing the absence of a clawback on convertible shares, the cost of new warrants, the longer duration of the interest payments and fees.

Merrill cuts its price target on Barclays shares to 204p from 235p. UBS cuts its target to 170p from 220p and Deutsche Bank cuts its target to 290p from 310p.

Reuters Messaging rm://steve.slater.reuters.com@reuters.net

08:41GMT 03Nov2008-SolarWorld up on strong Q3 results

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Shares in German solar energy company SolarWorld (SWVG.DE) rise 7.8 percent to become one of the biggest gainers on the Frankfurt's technology index .TECDAX, as preliminary third-quarter earnings before interest and tax (EBIT) come in above market expectations.

EBIT was up 67.3 percent at 90.7 million euros beating an average estimate of 67 million euros in a Reuters poll of analysts.

"Preliminary results for Q3 2008 clearly exceeded our and consensus forecasts for EBIT which makes us feeling comfortable with our full year estimate," Equinet analyst Sebastian Growe writes in a note, confirming a "buy" rating.

The company, which is due to report final third-quarter results on Nov. 14, also says it still expects profits and sales to exceed the target of 25-30 percent growth in 2008. For 2009, SolarWorld aims for profit and sales growth of 25-30 percent, the company's Chief Executive Frank Asbeck tells Reuters.

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