Tuesday, January 10, 2017

Shares of BCP slide more than 11% after capital increase – Jornal de Negócios – Portugal

the actions of The BCP are down 11.43% 92,22 cents, having reached the slide more than 16% to 87 cents. In terms of market capitalization, the BCP is now worth 731 million euros, an amount that more than doubles the completion of the capital increase.

To determine the fall of the shares is the announcement of the capital increase made on Monday, January 9. The capital increase is 1.33 billion euros, with the new shares to be sold 9.4 cents. This value represents a discount of 90% compared to the closing price of the shares in the last session, and 38.6% compared to the theoretical value. This operation will be used to repay the final tranche of state aid in the amount of 700 million euros, as well as to strengthen the solvency ratios.

At Fosun, through the “holding” of Chiado, you will invest a maximum of 531 million euros to strengthen its position in the bank led by Nuno Amado to raise to 30% its position in BCP.

Would expect that the actions of the BCP to reflect this ad, with the fall being held up by the commitment made by Fosun, which will subscribe to a significant portion of this capital increase, stress the analysts.

“The quotation of BCP should continue down, although there is the commitment of Fosun, subscribe for more 40% of the amount of the capital increase, to stay with 30% of the bank. Some shareholders are waiting for the transaction of the rights, so until that date the price should stay down,” explains Pedro Lino, ceo of Dif Broker, in remarks at the Business.

on the other hand, to hang the fall of the actions is “the fact of the Fosun have given an order irrevocable, except in exceptional conditions”. Or, “there is a shareholder who has an interest in strengthening their position, and for this you have to subscribe to the remaining shares or buy rights on the stock exchange,” adds the same.

“The expectations are that the title will continue to devalue, until you realize if Sonangol will or will not strengthen its position. If you do not reinforce, then the quote may react in strong low”, said Pedro Lino.

“The evolution of the quotation of BCP did precisely what was expected in scenarios of more recapitalisation through capital increase and in line with what happened in the rest of Europe in situations comparable recapitalisation”, highlights João Queiroz, director of trading of Banco Carregosa. “If you don’t if you knew from the outset that the Fosun would accompany the operation, the fall would be more accentuated,” he adds.

Still, João Queiroz points out that “the price evolution in the medium to long term, depends, above all, of the fundamental”, with the presentation of the results, scheduled for February 6, to be a focus that will attract the attention of investors that will be “attentive to the performance of the credit portfolio and the evolution of provisions and impairments”.

“Until expectations are cristalizem, the quotation should display a growing and high volatility. As advertised, the capital of cool will not stay on the BCP and are the investors to manage the uncertainty about the fate of these new features: for provisions of credit, to reimburse the Coco’s to the State, or both (provisions and return capital to the State),” says the responsible of the Banco Carregosa.

Already the Haitong issued a research note where it says that the closing of short positions could halt the fall of the BCP. “The fact that the ECB has approved the reimbursement of CoCos is in our view positive, since it may mean that the ECB believes that this capital increase is sufficient, together with the profits before provisions that is expected to reach in 2017, for the BCP to solve their problems of capital,” said the Haitong.

The investment bank highlights two factors that can help in the short term to stem the fall of the shares, offsetting the strong dilution resulting from the capital increase, as well as of the high discount at which the shares will be sold.

Adding the docking with the capital increase (1,33 billion), the market capitalization of 9 January (983,5 million euros), the BCP has a market value post-capital increase of 2,315 thousand million euros. Dividing this value by the number of shares after the completion of the operation (15.113.989.952), the theoretical value of the action of the BCP post capital increase and the prominence of rights is 0,1532 euros.

Taking into account the current price of BCP (closing Monday-Friday, 9 January), each right of the BCP presents a theoretical value of 0,888 euros. This value corresponds to the difference between the current price and the price theoretical featured post of the rights. Can also be found by multiplying 15 (the number of shares that each right allows you to subscribe to) by the difference between the theoretical price of the action featured post of the rights (0,1532 euros) and the price of capital increase (0,094€).

However, this theoretical value of the rights is at this time just a reference, since it will vary in function of the evolution of the quotation of the shares.

Taking into account the quotation of the shares on Tuesday (0,922 euro), the theoretical value of the rights is already 0,776 euros. Despite having already announced the execution of the capital increase, there are not yet dates for the various steps of the capital increase. When the operation boot officially there will be place to the accent of the rights, being at the time that the shares are going to suffer a technical adjustment in the stock market.

Note: The news does not dispense the consultation of the note of “research” issued by the investment house, which can be requested with the same. The Business alert to the possibility of the existence of conflicts of interest in investment banks in relation to the quoted review, as shares in its capital. To make investment decisions should consult the note of “research” in its entirety and inform your financial intermediary.


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