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Suspicion Around Financials

27 January 2015 by lberuti

Today was weak across the board. Investors are trying to evaluate the impact on their portfolios of the many different stories that recently made the front page of the papers, and the tone was definitely more cautious on financial companies, particularly banks. The confrontational stance which could be adopted by the newly elected Greek government and the downgrade of Russia were among factors dampening sentiment, but the catalyst for the sector’s underperformance was Raiffeisen Bank International AG , which saw its subordinated bonds trade aggressively down (most of them are now worth hardly more than 50cts on the dollar). It is feared that the international arm of the Austrian cooperative banking group may be forced into a dilutive cash call. Concerns are mounting regarding risks in Russia, Ukraine and also the appreciating Swiss Franc, a factor that has affected Austrian banks on the back of their ties with Hungary and Poland.