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If You Blinked You Missed It

22 November 2016 by lberuti

“We have been hacked” said the spokesman of VINCI ( Vinci SA ), denying that the company had released any statement earlier in the afternoon. At 4.20pm, he said that VINCI had been the victim of defamatory statement and that the release claiming the French builder had fired its finance chief amid irregularities was a hoax. Nevertheless, 10 minutes earlier when news that VINCI had discovered accounting errors hit the wire, some did not think twice and pressed the sell button. The stock plunged 18%, wiping more than €6bln of market capitalisation, before recovering most of the loss after the report was confirmed to be false. While the stock experienced its most extraordinary 15-minute trading spell, credit investors hardly had time to react and VINCI’s 5-year risk premium was stable all day long, a couple of bps tighter than yesterday’s close at 58bps. While volume exchanged on the stock was 4 times the daily average since the beginning of the year, nothing out of the ordinary was reported on CDS. The French market authority has launched an enquiry, and that unheard of type hoax will probably give many foods for thought in the coming days. Meanwhile, the broader credit market went through another quiet session and, in a similar fashion to yesterday, both ranges and daily variations were minimal for all indices. If anything, iTraxx Financial Senior slightly outperformed the rest of the market as relative value trades were unwound.