Spanish banks’ plans to sell off holdings in other companies may prove a positive catalyst for some of the stocks likely to be an offer, reckons UBS.
Investors have been spooked by the prospect of the stake sales - worth an estimated 22 billion euros - as Spain’s banks battle to balance their books in the face of surging bad loans and a steep recession.
But strategists at UBS note that “part of the risk is discounted: stocks affected by overhang are down strongly - minus 49 percent in 12 months”.
“In a few cases - e.g. Ebro Foods, NH Hoteles, IAG - we see potential buyers of the stakes that may be a positive catalyst for the stock,” they say in a strategy note.
“In others we believe fears are exaggerated - e.g. Iberdrola, Abertis - since the overhang may be partially absorbed by buy-backs or institutional buyers.”
However UBS remains cautious on the banks themselves, with a ‘sell’ rating on Bankia, Santander and Bankinter. It notes that the sales won’t make much of a dent on the sector’s funding gap of some 500 billion euros and “would not create much capital given implied losses”.
Shares in Bankia are down 5 percent following a 13 percent slump in heavy volume on Monday after spooking investors by asking for a 19 billion euro state bailout - nearly twice as much as had been expected.
For a FACTBOX on Spanish banks’ industrial stakes see
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