Troubled Italian bank Monte dei
Paschi di Siena (MSP) gained just over 2% in morning trading
Tuesday on the Milan bourse following a U-turn by HSBC analysts.
Just last week, the London-based banking corporation cut
its rating of the world's oldest operating bank from 'neutral'
to 'underweight'.
However on Tuesday HSBC reportedly changed its mind, saying
shares in the Siena bank - which had dropped as much as 44.8% in
market trading value since the start of 2014 - could soon rise.
MPS shares rose 4.5% to 0.62 euros per share in early
trading Tuesday, before cutting back the gain to settle at 0.6
euros per share (+2.02%) just before midday in response to the
news.
The Sienese bank is struggling to manage the fallout from a
number of failed operations that have drained the bank,
particularly since its takeover of the smaller Antonveneta bank
in 2008 and subsequent derivatives trades which prosecutors said
were made to conceal losses.
More recently, MPS was hit hard on financial markets after
stress tests by the European Central Bank (ECB) in late October
found it had a capital shortfall of 2.1 billion euros.
MPS had already raised some five billion euros in new
capital in early summer in order to repay a State bailout and
avoid nationalization, as well as shoring up reserves ahead of
the ECB assessment.
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