Fannie's capital better than market perceptions: Lehman

(Reuters) - Fannie Mae's capital and reserves positions are better than market expectations, and the biggest U.S. mortgage finance company may not need any more externally raised capital, according to an analyst at Lehman Brothers.

Lehman's Bruce Harting is the latest among Wall Street analysts to say that the government sponsored-enterprises (GSEs) have no immediate need for capital.

Shares of Fannie Mae and Freddie Mac rose in morning trade Thursday, prompted by easing concerns about capital needs at the two mortgage finance GSEs, and Fannie's announcement of management changes to preserve capital and cut losses.

The stocks are at their highest levels since August 19, but are down more than 80 percent year-to-date.

The shares had plummeted amid fears the two companies did not have enough capital to sustain themselves as the U.S. housing market worsens and that a bailout would result in their common shares becoming worthless.

"While the recent price movement in the stocks impacts the cost and ability of the GSEs to raise new capital, neither company currently has a capital shortfall and both continue to do new business," Harting said.

Even if neither Fannie nor Freddie raises another dollar of capital over the next year, both companies would likely remain above their statutory minimum requirements, he said. He has an "overweight" rating on both the stocks.

On Wednesday, Merrill Lynch said it was premature to consider a recapitalization sponsored by the U.S Treasury for Fannie and Freddie, while earlier this week Citigroup had estimated that the two companies had enough capital to absorb probable losses through the end of the year.

Last month, the U.S. Treasury promised to re-finance Fannie Mae and Freddie Mac, if either were facing collapse.