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Strategies & Market Trends : Mr. Pink's Picks: selected event-driven value investments -- Ignore unavailable to you. Want to Upgrade?

To: Mad2 who wrote (17520)	2/23/2003 4:45:37 PM
From: RockyBalboa	Respond to of 18998

Hi, Mad, HVB and Commerzbank are really at high risk, none of possible suitors touches especially coba with a 10-ft pole right now. Auditors, in concert with regulators are stretching the rules quite a bit to allow coba to show a positive equity on balance. This year, an ominous item called other earnings reduced the annual loss by some 70%, but they still posted a loss of nearly 60c/shr. In reality (well, if there was a mark-to market) much of the book should be written off and several banks and insurances would be in violation of their regulatory capital requirements. The market puts already a very low valuation on their equity. The book value (not counting reserves and additional regulatory capital) is at about 21/shr (40 including regulatory capital) but the stock trades at 6. Their ratings have been downgraded each year since 1999 (from AA to A) and that have been years where it showed earnings of 1.1 and 1.8/shr . Its much like japan where banks were allowed to carry non performing loans at face value for more than a decade now.

To: Mad2 who wrote (17520)	2/24/2003 6:37:28 AM
From: RockyBalboa	Read Replies (1) \| Respond to of 18998

And now, something completely different: European stocks slide as Ahold casts long shadow Monday February 24, 6:17 am ET By Huw Jones LONDON, Feb 24 (Reuters) - A shock warning from Dutch supermarket group Ahold (Amsterdam:AHLN.AS - News) rekindled investor fears over the trustworthiness of company accounting to grease a slide in European shares by late morning on Monday. "It's unfortunate as the markets had put this issue of accounting behind them, and any bad news like this is the last thing the market wants," said David Thwaites, European strategist at BNP Paribas. Ahold shares sank 66 percent to 3.30 euros with 23 million shares trading hands, over four times the average daily volume in the past three months. The company's bonds (NL014028064=) also raced lower. Investors were wracked with worries about the honesty of corporate accounting throughout last year amid fallout from the Enron and WorldCom scandals. "My gut feeling is this is a company-specific at issue at Ahold rather than a market issue," Thwaites said. "Short-term, the market was up at the end of last week and it's a good excuse to take profits, especially with a U.N. resolution (on Iraq) coming." At 1105 GMT, the FTSE Eurotop 300 index (London:^FTEU3 - News) was down 0.9 percent at 778 points, with declining issues outpacing advancers by three-to-one as the benchmark remains barely 10 points away from its six-year closing low of February 13. The narrower DJ Euro Stoxx 50 index (Zurich:^STOXX50E - News) dropped 1.7 percent to 2,171 points. Ahold said it found accounting irregularities at its U.S. Foodservice unit and that it had been probing the legality of certain transactions at its Argentine subsidiary Disco. "Is 'Ahold' Dutch for 'Enron'?" asked one pan-European equity dealer in London. The group also said its chief executive and chief financial officer would step down and that earnings for 2002 would be significantly lower than previously indicated, and that it was restating its earnings for 2000 and 2001. But the group said it believed it was now fully funded after having secured 3.1 billion euros ($3.3 billion) in new credits. Ahold's news sent a chill throughout the supermarket sector and rekindled worries about the accuracy of balance sheets generally, reminding investors of last year's woes over Enron and WorldCom. Elsewhere in the supermarket sector, Belgium's Delhaize (Brussels:DELBt.BR - News) was down 4.2 percent at 14.97 euros, while leader Carrefour (Paris:CARR.PA - News) of France dropped 1.7 percent to 35.48 euros. France's Casino (Paris:CASP.PA - News) shed 2.9 percent to 55.15 euros. Stakeholders in Ahold also saw their shares plummet, with ABN AMRO Bank (Amsterdam:AAH.AS - News), Fortis (Amsterdam:FOR.AS - News) and Aegon (Amsterdam:AEGN.AS - News) sliding between four and six percent. U.S. stock index futures were slightly lower as Wall Street headed for a flat opening. BAYER BEATEN DOWN Germany's Bayer (XETRA:BAYG.DE - News) fell 5.3 percent to 15 euros after a report that the company may have known about problems with its Baycol anti-cholesterol drug years before it was pulled from the market. Shares in Generali (Milan:GASI.MI - News) zoomed 3.7 percent higher to 23.79 euros as a month-long rally continued amid persistent speculation about stake-building at Italy's biggest insurance company. Swiss chemical firm Clariant (CLRZn.VX) shed 11 percent to 12.65 Swiss francs, hitting all-time lows on fears that the indebted firm could unveil a rights issue when it is expected to detail a new restructuring plan on Tuesday. Shares in BAE Systems (London:BA.L - News), Europe's biggest defence contractor, fell 5.5 percent to 114-3/4 pence after its credit rating was cut and on mounting fears of prolonged weak demand for aircraft. Italian industrial group Fiat (Milan:FIA.MI - News) rose 2.8 percent to 7.1 euros. The indebted firm's chairman and chief executive met their opposite numbers from General Motors (NYSE:GM - News) on Sunday amid speculation that Fiat could be seeking cash in return for scrapping or delaying an option to sell GM the rest of the struggling car-making arm. BHP Billiton (London:BLT.L - News), the world's largest diversified miner, said its first-half net profit fell 19.4 percent, due mainly to currency movements, and it remained cautious on its near-term outlook. Billiton shares gained 3.6 percent to 327-1/4 pence.

To: Mad2 who wrote (17520)	2/27/2003 5:38:01 AM
From: RockyBalboa	Respond to of 18998

Today, Hypovereinsbank plummeted up to 15% to an unseen low after the Handelsblatt announced that it will issue a mandatory convertible. Shareholders hated the news. Mandatory convertibles are quite in fashion now as the usual convertibles are a tough sell. Recently, Telekom did one and that also sent the stock southwards. HVB rejected such plans, but now the market believes that their equity is weaker than previously assumed. I wonder whether such mandatory convertibles have floorless abilities. I have not found a reference at what price they would be converted. There can not be a large premium to market in any case. Perhaps someone of the conv arb specialists can shine a light on that.