Hi all. How can one short Banco Popolare SC of Italy and Banco Santander of Spain. I dont want to short their ADR but would rather prefer to go directly into those markets. Any good ways to go about it. Does Schwabb brokerage offer trading in these exchanges. I know the spanish exchange is called SM? What is their italian counterpart. Anyone trade these markets? Thanks guys. Cheers.
i’m long spain bank…
Mind telling why frank? How did you reach that conclusion?
I’ll keep it brief and i fully recognize at this point it has been an error from a trading perspective due to underperformance. Been holding since May 2010…entry price 8.50-9.00.
To sum: its an above average bank in a crappy economy selling at a below average bank price.
1)above average performance. its an above average global bank based on efficiency ratio, ROE, NII, meeting requirements etc…
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management. i think Botin is a true banker. he has taken a sleepy regional bank to the largest in Europe through many many acquisitons (not easy to do, and notice they have only been selling to raise captial). Notice other banks HSBC, citi had to offload a ton of crap once crisis hit…this mght happen to banco too, but not yet…
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business model. diversified retail focus subsidiary model. focus only on places where they have a10% or more market share.
If anybody disagrees with me, please shed light…once i get past the fact euro will not break up (big if) this is a bargain security…
Thanks Frank. I do agree with you on Bolin but dont you honestly think Spain alone cannot pull off without ecb or any kind of bailout. I see blood on the street if this does not happen. I am also abit bearish on the lat american angle if we enter new semi recession. Speaking of spanish banks which of two is better according to you…BBVA or Santarder
ECB needs to step in. problem is, this whole Euro thing is difficult to pull off without fiscal unification (as everybody knows) but there are good reasons why breaking up of the Euro may not happen (you can argue the opposite as well).
Before i bought San i considered BBVA and i still look at the two as similar in so many ways. BBVA however offers a lower dividend but has higher ROE/ROA due to San having made more acquisitions (more goodwill&intangibles to assets). San however has had a better track record of pulling off acquisitons and containing cost (San efficiency ratio stands a bit better). BBVa’s lead position in latin america is mexico versus San in Brazil, so that is another factor.
I think these two banks are getting slaughtered in large part due to non-company specific factors. Many ppl such as yourself are shorting Spain through shorting these stocks (its been working) so its definitely a trade you can pull off. San would be better to short due to more liquidity (its the most liquid stock in Europe from what i know).
check out this presentation on why Spain is going to go to ashes: http://www.scribd.com/doc/88388379/Investment-Focus-The-Pain-in-Spain
Thanks Frankie. Like your sober & pragmatic outlook at things mate. I must say I was a bit turned off by you after liking that cougar canadian tv personal (forgot her name), Glad you are out of it though. 
Will be looking forward to talking you indepth on trades and future prospects. Your take on today’s Oaktree IPO? Do you see credit as a the biggest big bang?
In between where are you located mate? Are you an Arab not that in matters.
Cheers
Amanda Lang is a hot classy babe…
Never looked at the Oaktreet IPO…
Not interested in investing in bonds at the moment, not enough yield…stocks will do better…
Frankie what is your take say on what I saw from another posted here in AF concerning fixed income fx 1 yr maturity product from developing countries. I may have few and willing to sell it to value investors… How should I go about them. Thanks.
i doubled down again on banco.
ex. recent purchase, i’m down 50%ish on banco…
Good writeup. I’m considering dipping into their preferreds. Not man enough to buy common stock yet.
thing is, the common is yielding 12%…i’m still trying to figure out if a dividend cut is imminent…its extremely difficult to figure this question out as the bank can easily sell latin american operations to cover capital shortfalls but may be relunctant to do so (for the right reasons)
…however given my understanding/belief that their normalize income levels range in E$6-7B a year and provisions that need to be taken ($6B more or less), dividend payout this and next year may be covered through organic capital/scrip dividend/asset adjustments. I don’t expect them to earn until 2014 onwards (as their CEO pointed out)
this is by far the most difficult investment I have made. take a look at their annuals…despite it being a retail bank, their 10+ core markets/IFRS accounting/bank technicals make for a strenuous study…
i have yet to find someone who can convince me that this bank sucks…i’m inviting all naysayers…
Frank = How you shouldn’t invest
Frank’s mistake is that he’s stock picking without taking into account broader macroeconomics
Frank, so you’re telling me you bought Spanish banks as all the red flags were waving; when you could have put that money into a U.S. equity and enjoyed a nice rally. It’s like buying a great house in the poor side of town.
Anyone that’s listening to Frank’s nonsense explanations needs to have their heads checked!
Frank’s going to write a book called, “Why losing Money is a good thing!”
i don’t think i ignored the macro completely as I don’t think the Euro will break up. You have to keep in mind how cheap the stock is in relation to its fundamentals. i’m definitely wrong in the short run though.
i did get into US equities as well. but as you said, they have rallied so its not worth talking about.
i’m not so worried about where the share price is right now, i’m more concerned on whether i’m right on the business because if i am, i will make my money.
and what were these red flags on the spanish banks specifically? not macro factors which i’m well aware of and for my own reasons, semi ignored.
He’s not betting against macro tides, he’s waiting for macro tides to expose value.
I’m just wary of investing in common stock because of the constant danger of raising new equity. Also I’m not know enuf about analyzing banks to be confident in my bets. Maybe OOTM calls are also a possibility?
With the possibility of Hollande winning in France; and his promises of no harsh Austerity. Can you say French downgrade? I think it’s safe to say that the Euro structure is simply unsustainable. Therefore, for me, the break up of the Eurozone is a real possibility. Who’s going to continue to pour money into Euro soveriegns when they can’t seem to get their act together. With that in mind Euro equities as a long term bet don’t seem to make sense unless you like gambling because there is nothing out there that points to the Eurozone getting their fiscal house in order.
Additionally, growth is not a serious option without a serious devaluation of the Euro; which the ECB says it will not do. Additional impediments to growth include high unemployment, high levels of taxation, and etc. And the Euro summit agreements are meaningless in my book as each country continues to miss their targets. The Eurozone has some serious structural issues if you ask me.
@Palantir, “…he’s waiting for macro tides to expose value”, how long is the wait going to be? 1yr, 5yrs, 10yrs?
you have provided nothing new in terms of info. I won’t even debate the merits of your arugment as it is well addressed in news sources and it is not even a bank specific issue (is Santander inferior to other euro banks? )
but i concede i’m wrong in the short term.
i have no problem waiting for 10 years not one bit.
Isn’t Santander more exposed to Latin America than rest of Europe? They have all these divisions in Argentina/ Mexico etc