Reuters: Regulatory News: UPDATE 2-Spain extends short-selling ban for three months

Reuters: Regulatory News Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

UPDATE 2-Spain extends short-selling ban for three months Nov 1st 2012, 10:37 Thu Nov 1, 2012 4:42am EDT MADRID Nov 1 (Reuters) - Spain's stock market regulator is to extend a ban on the short-selling of securities for three months to Jan. 31 to discourage investors from trying to profit from the country's economic crisis. The crisis has knocked more than 8 percent off Spain's blue-chip IBEX 35 index over the past year. Big losses earlier in the year led Spain, along with other European countries, to prohibit short-selling in July. Short-selling is when investors borrow shares, sell them and later buy the shares back at a lower price, turning a profit. The extension of the ban is good news for Spain's banks, a popular choice for short-selling as investors bet that the share prices of troubled lenders will fall farther. Spain negotiated a bank bailout of up to 100 billion euros ($129.5 billion) in June. "The bank restructuring process is still not completed, leading to uncertainty about the sector, which could affect financial stability. In this context, not banning short-selling could add to uncertainty," regulator CNMV said in a statement on Thursday. On Wednesday Spain's central bank approved private capitalisation plans for banks Popular and Ibercaja, and said that it expected four other lenders would need public support. The Bank of Spain findings may mean that the government could end up using more of the European credit line than the 40 billion euros previously estimated. Spanish banks' share prices have tumbled in the past year, with biggest loser Bankia down 68 percent, while Popular has shed 66 percent. Banks have reported huge drops in nine-month profits after writing off losses on bad property investments. Spain had previously extended July's ban to the end of October and said that it would seek European approval for a further three-month ban. Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions