What about Banco Popular's shares?

<>
Banco Popular shares plummet in equity markets before the announcement of a capital increaseAnd the panic - how could it be less - has seized many investors who realize that they are already losing a lot of money in their open positions in this financial institution. The question that some of them now ask themselves is what they should do with their shares, keep them or, on the contrary, sell them to the market even at the cost of losing a good part of their invested assets.

In this scenario, there is also no lack of investors with a more speculative profile who are attentive to its evolution in case they consider a take positions in the face of low prices presentado por la entidad financiera que preside Ángel Ron. Difícil dilema, be cual sea el caso, para estos inversores que son muy conscientes de todo lo que surge en este valor de la renta variable. E inclusive si puede dar lugar a mayores movimientos bruscos, de una forma u otra.

To begin with, nothing more than to indicate that your actions have depreciated by no less than a little more than 30% in a few trading sessions. Rarely has a movement to the downside of such intensity been seen, especially with one of the great specific weights of the Spanish stock market. It has been developed with tremendous virulence, and in some cases considered disproportionate by certain experts in the financial markets.

How are Banco Popular shares priced?

After its collapse of national equities, the price of its shares is around 1.60 euros. With a negative behavior so far this year of the 48%. This means that small investors who had taken positions before the start of this year have lost almost half of their savings. No more no less. Hence the concerns they have today about the future of the listed company.

Despite everything, their shares have been moving under a very clear downtrend for a long time, which was highly undesirable for taking positions in the value. And that after the serious fall of the last weeks has strengthened it considerably. Not in vain, ha roto muchos soportes de especial relevance. To the point that it is very difficult to find an entry point, as noted by prestigious financial market analysts during recent trading days.

Whatever the case, Banco Popular shares are among the least recommended to buy today in the banking sector. Where there are other more rewarding options, where there are greater opportunities to monetize successful savings. Even through dividends, with quarterly distributions of this payment to the shareholder.

What is happening with the banking sector?

Banco Popular's problems can be extrapolated to other financial groups that trade stocks. They are derived from lower profits in their commercial accounts that are affecting the entire sector in general. Its benefits are less than in other exercises.and it is reflected in the price of your shares. To the point that the financial index in Spain maintains a worse evolution in the stock market than that offered by the rest of the stock market offer. The uncertainties about its business model is one of the reasons why investors, both retailers and large funds, do not trust its proposals.

The cheapest price of money by the European Central Bank (ECB), and that has led to lower interest rates to a historical 0%, is at the center of this loss in the commercial margins of Spanish banks. They are even thinking of charging customers for the main banking operations, as the highest authorities of the two main Spanish banks have warned: BBVA and Santander.

Whatever the case, it is one of the sectors with the lowest growth expectations, at least in equities. And that is highly exposed to the result of the following referendum on Britain's exit from the European Union which will take place on June 26. If Brexit is the winner, there is no doubt about the big falls that the entire banking sector could have as a whole. And if, on the contrary, it were not, it could initiate a certain recovery in the financial markets. Or at least a bounce that could benefit small investors' long positions.

From this phase, very few analysts recommend opening positions, and yes, at least wait for this problem that Spanish citizens have about whether or not they belong to community organizations to be resolved. Until the end of this month, it will be better to forget a bit about your values, and focus on those that are doing better on the stock market. Some of them, with a very promising trend, like to get a few euros in their operations.

Start of the capital increase

One of the main reasons for this debacle of Banco Popular in the Stock Market is due to the fact that the bank announced a capital increase, which has taken a large part of investors out of the game. This procedure will be carried out on a total of 2,500 million euros, and it will be useful to clean up the company. Regardless, the idea that this is a move to protect itself from the corporate operations of other banks has been gathering momentum in recent days.

The risk of suffer an OPA por parte de la competencia además está en el origen de esta decisión monetaria a gran escala. Las persons que intentan abrir puestos a través de los derechos pueden conseguir beneficios importantes, pero los riesgos están más que latentes. A tal efecto, la opinión de los principales intermediarios financieros se divide, entre quienes encuentran atractiva esta entrada en el banco, y quienes optan por no dejarse tentar por esta strategy de inversión.

Banco Popular shareholders will still have a few days to subscribe for the new shares in the bank, since Hasta el 11 de junio podrán ejercitar su derecho de subscription preferente to attend the capital increase for 2,505 million euros initiative by the entity or, if they prefer, commercialize their rights. Each one will have a nominal value of 0.50 euros. Whatever the case, the new shares will each have a unit issue premium of 0.75 euros, which means that the issue rate for each new share will be 1.25 euros.

No decrease in your rating

This news, which has worried small and medium investors, did not have the same effect among the main rating agencies, which have decided to maintain their rating after the announcement of the capital increase. In fact, there is no change in that, even when they warn that they will expose it in case of news in the development of their line of business during the coming months, being willing to lower their credit rating.

In the event that this decrease in the Banco Popular note is confirmed, the effects on its price could be even more virulent, without ruling out that it could break the barrier of the euro per share. Something that those investors who have taken positions many years ago fear. And they have visualized how part of their savings has gradually disappeared, until reaching the current contribution levels.

7 tips to get in or out of value

The big question that many investors have today is whether they should have access or leave Banco Popular. It is not an easy decision, which will depend fundamentally on the profile of the saver and, fundamentally, on the price at which the shares have been purchased. Understand the nerves that arise from the sharp drop in your share price. Whatever the case, and as a help line, they will be able to import a series of recommendations that can be of great advantage from now on.

1. If you are in liquidity it will be recommended that stay in the same state for at least a couple of weeks, until checking how the market digests the capital increase carried out by Banco Popular.
2. If you have been a shareholder of the bank for many years, you will have no choice but to wait. It's not about trading stocks at these low levels. Take advantage of the bounces to gradually decrease positions.
3. Don't try to buy stocks to make spectacular moves since the risks are enormous. It is preferable that you opt for other options that are present in Spanish equities.
4. If you want to take positions on the stock market, it can be more beneficial through rights than by direct purchase of shares. You can even save a few euros in the procedure of this procedure.
5. Take into consideration that you are before one of the most problematic values of the Spanish Stock Exchangeand you may not have to risk your savings. You can lose a very important part of them.
6. The shares of this bank have been drawing a trend for several months. trend clearly bearish, and that it is not advisable to open positions in security under any circumstances.
7. The fact that its price is close to one euro unit, doesn't necessarily mean it's cheap, lejos de ahi. Como era de esperar, el precio target para muchos de los corredores internacionales se estipula cerca de los niveles de 2 euros.