Shares of the week - storms Wells Fargo & Co.
On increasing scholarships around the world last week, not past and the Bulgarian Stock Exchange, sending the index value SOFIX spotlight at its lowest since June 2005 and after. Lack of company’s domestic market to increase as a favorite for the week, led us to look to turn the U.S. market, which is an important barometer of investor behavior in recent weeks.
The winner at the bank Wells Fargo & Co. this week estimation share USA caused this decisive step to change the institution Citigroup in the battle to create a new colossus in the financial market in the largest. As is known, Citigroup and Wells Fargo is involved in the fierce battle for the bank Wachovia Corp. committed., Far more problems from the end to become known throughout the investment community. The interest in acquiring Wachovia is linked to the massive deposit of the establishment which would allow each competitor two become one of the three pillars of the banking market in the United States, which began to emerge from the crisis and arrange the Bank of America and JPMorgan. Currently is not yet sure whether the case will be implemented as Citigroup insist that they must take control of Wachovia bank. The reason is that in the early weeks regulators approved the offer by the bank, which has earned only 2.16 billion dollars and included support from the state to cover part of losses. By Wells Fargo, however, the credit crisis expressed determination to use as a place to turn into a monster and proposal made much more impressive worth of 15.1 billion dollars and does not provide any state aid, and does no additional burden on taxpayers of the United States. Interestingly, in this case that the acquisition of a large bank like Wachovia avoid strict corporate policy of Wells Fargo to carry only small acquisitions that do not establish unnecessary risks. Exactly the conservative head of the bank in recent years has permitted no exposure in the segment links to high risk and to protect themselves against the crisis, which has now led to the displacement of capital to 600 billion dollars World. Therefore, against a context of universal collapse in the price of financial companies, market capitalization of Wells Fargo rose by almost 21 percent from the beginning of the year. It is much better than the movement of shares of Citigroup, which fell by over 35 percent. If the operation is successful acquisition, Wells Fargo increased its capital to over 1.4 trillion. dollars and the total number of offices it would reach 10 761 in a total of 39 states. In this situation the bank assuredly would be one of the three largest private financial institutions in the United States, Bloomberg said. After plans and forecasts announced that Citigroup will probably out of the case, the market capitalization of the bank fell by 18.44 percent at a price of 18.35 dollars per share. The values of Wells Fargo become cheaper with 1.71 percent at 34.56 dollars cash and Wachovia was up by 58.8 percent to 6.21 dollars cash.
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