Lisbon’s stock market is in tatters today after shares in Portugal Telecom hit an historic new low. And although analysts claim there is “no news that explains” the shock, the truth is that its roots lie at the heart of the Espírito Santo banking scandal.
Only last week, a court in Luxembourg refused a request for controlled management of ES-subsidiary Rioforte (which would have given Espírito Santo International protection from its creditors). Now, the likelihood of Portugal Telecom ever recouping the €900 million it loaned the company is fast receding.
According to financial website negócios online, the knock-on effect of PT’s woes has wiped almost 2% off Portugal’s major stocks – though there has been some good news.
Shares for instance in BCP – the bank tipped to fail ongoing eurozone stress tests – rose by 2.88% after investment group Société Générale considered it may well pass.
But PT’s “crash” hogged the limelight, with Expresso’s website declaring: “Until midday every minute that passed saw share prices falling”.
Indeed by midday shares were trading at €0,865 which values the telecommunications giant at around 788 million euros.
“This value is even less than the 897 million euros that the company invested in Rioforte,” explains Expresso.
PT’s problems have accelerated since the disastrous Rioforte investment and a subsequent merger with Brazilian telecommunications company, Oi – which recently announced it now wants to sell PT off as quickly as possible.
Stock losses as PT shares bomb by more than 27%
