Bank shares have never been cheaper, but Morgan Stanley warns it is still too early to start thinking of buying the sector. The American broker made its comments as it downgraded Barclays from overweight to equalweight while slashing its target for the High Street lender's shares from 275p to 170p. It says the sector should be avoided, given the current move by the banks to reduce debt and increase funding while facing a weaker macroeconomic outlook and tougher regulation in the wake of the subprimemeltdown. Barclays recently rejected Government help in re-funding, choosing instead the support of sovereign wealth funds in Qatar and Abu Dhabi. The funding may turn out to be more expensive than that offered by the Government but it enables the Barclays board to retain its independence and call the shots when it comes to how it...
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