The Milan stock exchange
continued losing ground Monday as investors sold their bank
shares on concern over delays in the setting up of a so-called
bad bank to absorb toxic loans.
Also weighing on Italian and European markets were Brent
crude prices, which slid to 2003 lows of under $28 a barrel as
the lifting of sanctions against Iran means the Islamic Republic
can start exporting again.
European investors also expressed fears of a continued
Asian economic slowdown ahead of China GDP numbers out Tuesday,
and the closure of Wall Street as the United States celebrates
Dr. Martin Luther King Day did not help matters, analysts said.
In Milan, the FTSE Mib index shed 2.65% at under 19,000
points by the close.
Banks took a hit and Monte dei Paschi di Siena (MPS) was
suspended after plunging to a historic low of 0.76 euros a share
(-15.1%).
It ended up 14.8% down on the day.
This means the bank is worth 2.2 billion euros after it
obtained a capital increase of three billion euros last summer.
In comparison, UniCredit (-18% since the beginning of the
year) has market cap of 25 billion euros and Intesa Sanpaolo of
45 billion euros.
MPS share prices have lost 50% since the end of October and
38% since the last trading day of 2015.
Investors shunned the Siena-based bank on fears it won't be
able to get rid of its non-performing loans.
The lender announced on December 28 that it is selling one
billion euros' worth of toxic loans to Epicuro SpV, owned by
Deutsche Bank.
MPS said the operation is part of its plan to transfer 5.5
billion euros in receivables under its 2015-2018 industrial
plan.
MPS CEO Fabrizio Viola on Monday downplayed the 14.8%
bourse fall, saying the Tuscan lender was "stable" and focused
on getting better results on non-performing loans (NPLs).
"We confirm the economic and financial stability of the
Bank, highlighted by the results of the (European Banking
Authority's Supervisory Review and Evaluation Process) SREP and
the improvement in operating management as shown by the results
achieved in the first nine months of 2015," he said.
"The share price's drop occurred without any management
issues apt to justify such progress," Viola said.
"With reference to the management and sale of NPLs," he
said, "we are concentrating (on this) in particular in order to
obtain results that are even better than the (Business) Plan".
Also suspended were Banco Popolare, Bper, Carige, and UBI
bank.
They continued losing ground after trading resumed, with
Bper (-8.67%), Banco Popolare (-6.7%) and UBI (-7.3%), BPM
(-5.5%), Intesa Sanpaolo (-5%) and UniCredit (-5.4%) by the
close of trading.
Bucking the trend were Luxottica (+0.6%), STM (+1.7%), and
Telecom steady after Vivendi increased its stake to about 21.4%.
Elsewhere in Europe, markets opened up, plunged mid-morning,
then recovered to trade flat.
European bourses closed with marginal falls, with London
0.42% off, Frankfurt down 0.25% and Paris 0.49% off.
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