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Liberbank shares recover after regulator bans short selling
June 12, 2017 / 6:45 AM / 2 months ago

Liberbank shares recover after regulator bans short selling

A cash dispenser is seen at a branch of Liberbank in Oviedo, Spain, June 9, 2017.Eloy Alonso

MADRID (Reuters) - Shares in small Spanish lender Liberbank, in focus since the rescue of Popular last week, rebounded more than 20 percent on Monday after Spain's regulator enforced a short-selling ban on its stocks.

The lender, which was formed in 2011 from the merger of three regional savings banks and which controls around two percent of all Spanish deposits, had lost around 40 percent of its market value over the last two weeks.

Its shares were up 26.3 percent at 0.859 euro each at 0800 GMT, erasing the 17.6 percent loss on Friday.

Spanish stock market regulator CNMV said it would ban short sales on trading stocks of Liberbank for one month, after which it would decide whether to extend or lift the ban.

The CNMV said it had taken this decision after considering the recent stock performance of Liberbank in the aftermath of Banco Popular's rescue.

Short selling is the sale of a security that is not owned by the seller, or that the seller has borrowed, and motivated by the belief that a security's price will decline, enabling it to be bought back at a lower price to make a profit.

Reporting By Jesús Aguado, additional reporting by Gdynia newsroom; Editing by Julien Toyer, editing by Louise Heavens

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