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Pimco and BlackRock also Eurobank shareholders

29 April 2014 / 15:04:07  GRReporter
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The change in the orientation of Greek investment banks from hedge funds to long-term investors is confirmed by the increase in the share capital of Eurobank, which involves serious representatives of the investment community such as Pimco, ΒlackRock, Ηighfield, JP Morgan Asset Management, Wellington, Lazard Asset Management, Schroeders, Marshall Wayne, Μοore Capital as well as sovereign wealth funds that have declared a serious interest too.

It is expected that the interest expressed will cover the purpose of the bank at least twofold. Moreover, the group of the major investors, Fairfax, yesterday increased its offer to 0.31 euro from the initial 0.30 euro per share, which will fix the issue price at 0.31 euro.

The new offer was accepted by the bank. Everything else will be in compliance with the conditions described in the bulletin and the amount offered by Fairfax will be 1.332 billion euro.

The deadline for offers for Eurobank expires today and tomorrow, Wednesday, the bank will announce the value of the issue and the allocation of the shares. In its communication, the bank specifies the terms and stresses that investors must comply with the information in the bulletin and the communications of the bank rather than with the information disseminated by the media or other sources.

The National Bank of Greece too is seeking to attract long-term investors, following the trends of Piraeus Bank and Alpha Bank in terms of the relevant procedures.

The gradual recovery of the economy, the transparency in the banking sector regarding the banks' capital requirements and loan portfolios achieved due to the conducted stress tests of the Bank of Greece, and the return of Greece to international markets has improved the confidence of long-term investors along with the interest shown by hedge funds whereas the high liquidity that has "escaped" from the emerging markets in search of sites for investment and profits has provided an additional impetus.

The change in the position of the Japanese investment company Nomura, which last month saw serious risks for Greek banks and yesterday gave a vote of confidence in a report and opened investment opportunities is significant too.

Nomura’s report

In its report, Nomura states that the actions to increase the capital of the four largest banks in Greece in combination with the improved profitability before provisions will allow them to cover any additional capital requirement that may arise as a result of European stress tests, while preserving the indexes based on Basel ΙΙΙ.

It also stresses that, in response to the adverse scenario by BlackRock, the banks will submit to the Bank of Greece capital plans. The central bank will evaluate them by June, in accordance with the report by the European Commission.

The Japanese investment company has improved its assessments of the profitability and the target prices, its "favourite" share being that of Alpha Bank with a target price of 0.75 euro compared to the initial 0.23 euro and the purchase proposal. This preference is based on the low cost, good capital adequacy and the relatively higher operating income.

Eurobank has achieved a neutral position with a target price of 0.40 euro from the current 0.30 euro which is equivalent to the position of Piraeus Bank with a new target price of 1.50 euro compared to 0.96 euro at present. The target price set for the National Bank of Greece by Nomura is 3.10 euro compared to 2.690 euro at present.

Tags: EurobankLong-term investorsShare capitalFairfax
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