Magazine article American Banker

Citicorp Sags on Worries of Foreign Market Risk

Magazine article American Banker

Citicorp Sags on Worries of Foreign Market Risk

Article excerpt

Citicorp shares dipped Tuesday after a prominent market watcher turned more pessimistic about its exposure to foreign markets.

Ronald I. Mandle, a chief banking analyst at Sanford C. Bernstein & Co., reduced earnings estimates and ratings on Citicorp and several other big banks that do business overseas.

Just three weeks ago, in the wake of the major market selloff on Oct. 27, Mr. Mandle dismissed Asian worries for Citicorp-and others with exposure-as "overdone" and rated the bank's shares "market outperform."

But in a report issued late Monday, Mr. Mandle expressed concern that the economic crisis has spread beyond Indonesia, Malaysia, the Philippines, and Thailand, to markets such as Brazil and Korea, where Citicorp has additional exposure.

He lowered his rating on Citicorp to "market perform" and reduced his estimate of 1997 earnings per share by 10 cents, to $8.40. He also reduced his 1998 earnings estimate by 30 cents per share, to $9.35, citing vulnerability to the emerging economies.

Citicorp shares fell $2.8125, to $119.25, for the day.

Among other stocks that have exposure overseas, BankAmerica Corp. rose $2.3125, to $75.3125, Chase Manhattan was down 56.25 cents, to $109.4375, and J.P. Morgan was up 50 cents, to $113.4375.

Bankers Trust New York Corp. also has extensive operations in foreign markets, but its shares were boosted Tuesday by reports that the company is in negotiations to buy a large part of the equities business of Natwest Group PLC. Bankers Trust shares rose $1.6875, to $117.375, for the day.

Some investors took the reassessments in stride. …

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