Well it depends on one's timeframe. I'm not confident about predicing Civica's performance over the next day, week, month or year. However in 5 years time, I would expect that Civica would underperform the IBEX, because it's a Spanish financial company, and I think the Spanish property bubble has further to deflate.
'This is the European Edition of our Quote of the Day: âAccording to current banking regulations, sovereign credits are considered ârisk-free.â This means that banks can take on as much sovereign credit risk as they like without setting aside any capital. Under such a structure, selling short CDS protection is akin to free money for the banks. Likely, the real worry is that the first default will expose the fiction that sovereign debt is risk-free. If the authorities permit one default, their credibility to prevent additional defaults will be lost. No one knows how much aggregate exposure to sovereign debt and CDS is hidden in the banking system, and no one is itching to find out. The European regulators are trying to calm the market by conducting âstress testsâ on the banks. This might be comforting if the stress tests included testing the possibility of a sovereign default. They do not. What is the point of a stress that fails to test the most obvious and visible risk facing the banks? - David Einhorn, Greenlight Capital July 7, 2011"
Well looking at today's action, it's sticking out like the proverbial sore thumb. Most Spanish banks are down between 3% and 5%, but BCIV is down by over 7%.
Any business can be run successfully if the owner does know how to manage it. Even though that many are interested to own a business but only few of them could have it. It is because there are so many things that you should consider before having it.
Spanish bank stocks have done worse than other European bank stocks in 2012. Worst performers include SAB, POP and BKIA. 13 February 2012 downgrade of Spanish bank stocks: http://www.reuters.com/article/2012/02/13/idUSWNA006420120213 CaixaBank S.A. BBB+/Stable/A-2 Bankinter S.A. BBB/Negative/A-2 Banco de Sabadell S.A. BBB-/Watch Neg/A-3 Banco Popular Espanol S.A. BBB-/Watch Neg/A-3 Banca Civica S.A. BBB-/Negative/A-3 Bankia S.A. BBB-/Negative/A-3
CABK to takeover BCIV (26 March 2012) http://press.lacaixa.es/caixabank/p...-leading-financial-group__1775-c-15833__.html The move will see current Banca CÃvica shareholders offered a swap of 5 CaixaBank shares for every 8 Banca CÃvica shares. ** This was a "takeunder", with BCIV shares falling after the merger announcement. http://www.bloomberg.com/news/2012-...for-1-3-billion-in-spanish-bank-overhaul.html ** At today's close CABK is at 2.9140 and BCIV is at 1.79. Target BCIV 8 * 1.790 = 14.32 Buyer CABK 5 * 2.914 = 14.57
1 March 2012 "Sabadell launches 913 mln euro rights issue" http://www.reuters.com/article/2012/03/01/sabadell-idUSL5E8E16B420120301 MADRID, March 1 | Thu Mar 1, 2012 8:17am EST Sabadell plans to issue 692 million new ordinary shares at a ratio of three new shares for every seven outstanding shares, the bank said. It had said in December it would aim to raise 1 billion euros via a capital hike to pay for the acquisition. The issue price of the new shares is 1.32 euros, a discount of 36.7 percent on the theoretical ex-warrant price based on last Friday's share price, the bank said.
The weakest Spanish banks seem to be POP 2.750 EUR * 1,820.06 million shares = 5,005.17 million market cap http://www.bloomberg.com/quote/pop:SM BKIA 2.752 EUR * 1,732.57 million shares = 4,768.04 million market cap http://www.bloomberg.com/quote/bkia:SM SAB 2.056 EUR * 2,297.98 million shares = 4,724.65 million market cap http://www.bloomberg.com/quote/sab:SM Bloomberg share count for SAB is 2,297.98 million shares. However if the rights issue is "692 million new ordinary shares at a ratio of three new shares for every seven outstanding shares" then this suggests a share count of 1,614.67 million shares (pre rights issue). Maybe the Bloomberg share count already includes shares issued as part of the rights issue.
The Carmel Asset Management presentation is getting a bit of press, so I'll link to it for future reference: http://www.zerohedge.com/news/spain-ultimate-doomsday-presentation http://www.scribd.com/doc/88388379/Investment-Focus-The-Pain-in-Spain WSJ article http://blogs.wsj.com/marketbeat/2012/04/10/meet-one-of-the-biggest-bears-on-spain/
Rating changes for Spanish banks: www.businessinsider.com/sp-axed-the-ratings-of-11-spanish-banks-this-morning-2012-4 Standard & Poor's ratings agency took negative actions on 16 Spanish banksâdowngrading 11 of themâfollowing a sovereign downgrade last week to BBB+. Santander: A+ to A- Banesto: A+ to A- Santander Consumer Finance: A to BBB+ BBVA: A to BBB+ Bankinter: BBB to BBB- CaixaBank: BBB+ (placed on creditwatch negative) La Caixa: BBB- (placed on creditwatch negative) Bankia: BBB- (placed on creditwatch negative) Banco Popular Espanol: BBB- (to remain on creditwatch negative) Banco Sabadell: BBB- to BB+ Banca Civica: BBB- to BB+ Ibercaja Banco: BBB to BBB- Kutxabank: BBB to BBB+ Confederación Española de Cajas de Ahorros (CECA): BBB to BBB- BBSA: A to BBB+ Banco Financiero y de Ahorros S.A. (BFA): BB- (placed on creditwatch negative)