Al-Khereiji: Collective action in combating terrorism is a must for achieving stability and prosperity    SFDA Chief visits premier biotechnology and medical firms in China    Saudi Awwal Bank becomes the Kingdom's first bank obtaining ISO certification for quality management system in operations    2- month jail and SR40000 in fine for woman citizen convicted of commercial cover-up    10 cooperation agreements signed during Saudi-Turkish Business Forum in Istanbul    Saudi Arabia's non-oil revenues grow 6% in 9 months while Q3 budget posts SR30 billion deficit    Spanish flood rescuers focus search on underground car parks    Quincy Jones, titan of US music, dies aged 91    Slavery reparations not about transfer of cash, says UK's Lammy    Pro-EU leader claims Moldova victory despite alleged Russian meddling    Domestic violence should not be taboo subject, says Queen Camilla    Enhancing zakat, tax, and customs compliance takes center stage at the Zakat, Tax, and Customs Conference 2024    Neymar expected to join Al Hilal squad for AFC clash against Esteghlal, says coach Jesus    Al Qadsiah secure 2-0 victory over Al Ettifaq in first Eastern Derby since 2021    Riyad Mahrez admits he's no longer the dribbler he once was    Al-Ahli coach Jaissle understands fans' frustration, vows to improve team's performance    MBC Group announces sale of Istedamah's 54% stake to Public Investment Fund for SR7.4 billion    Hidden sugars in Asia's baby food spark concerns    HONOR unveils pre-order of the stunning HONOR MagicBook Art 14 Featuring an ultra-slim design, HONOR Eye Comfort Display and AI Cross-OS WorkStation    Teri Garr, Young Frankenstein and Tootsie star, dies at 79    India puts blockbuster Pakistani film on hold    The Vikings and the Islamic world    Filipino pilgrim's incredible evolution from an enemy of Islam to its staunch advocate    Muted Eid celebrations for millions of Nigerian Muslims    Exotic Taif Roses Simulation Performed at Taif Rose Festival    Asian shares mixed Tuesday    Weather Forecast for Tuesday    Saudi Tourism Authority Participates in Arabian Travel Market Exhibition in Dubai    Minister of Industry Announces 50 Investment Opportunities Worth over SAR 96 Billion in Machinery, Equipment Sector    HRH Crown Prince Offers Condolences to Crown Prince of Kuwait on Death of Sheikh Fawaz Salman Abdullah Al-Ali Al-Malek Al-Sabah    HRH Crown Prince Congratulates Santiago Peña on Winning Presidential Election in Paraguay    SDAIA Launches 1st Phase of 'Elevate Program' to Train 1,000 Women on Data, AI    41 Saudi Citizens and 171 Others from Brotherly and Friendly Countries Arrive in Saudi Arabia from Sudan    Saudi Arabia Hosts 1st Meeting of Arab Authorities Controlling Medicines    General Directorate of Narcotics Control Foils Attempt to Smuggle over 5 Million Amphetamine Pills    NAVI Javelins Crowned as Champions of Women's Counter-Strike: Global Offensive (CS:GO) Competitions    Saudi Karate Team Wins Four Medals in World Youth League Championship    Third Edition of FIFA Forward Program Kicks off in Riyadh    Evacuated from Sudan, 187 Nationals from Several Countries Arrive in Jeddah    SPA Documents Thajjud Prayer at Prophet's Mosque in Madinah    SFDA Recommends to Test Blood Sugar at Home Two or Three Hours after Meals    SFDA Offers Various Recommendations for Safe Food Frying    SFDA Provides Five Tips for Using Home Blood Pressure Monitor    SFDA: Instant Soup Contains Large Amounts of Salt    Mawani: New shipping service to connect Jubail Commercial Port to 11 global ports    Custodian of the Two Holy Mosques Delivers Speech to Pilgrims, Citizens, Residents and Muslims around the World    Sheikh Al-Issa in Arafah's Sermon: Allaah Blessed You by Making It Easy for You to Carry out This Obligation. Thus, Ensure Following the Guidance of Your Prophet    Custodian of the Two Holy Mosques addresses citizens and all Muslims on the occasion of the Holy month of Ramadan    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Citi shares fall after U.S. delays stock sale
Published in Saudi Press Agency on 17 - 12 - 2009

Citigroup Inc shares fell sharply on Thursday, a day after the bank"s $20 billion stock and bond offering drew a cool reception on Wall Street and prompted the U.S. Treasury to delay plans to start selling off its Citi holdings, according to Reuters.
The shares fell as low as $3.15, down 8.7 percent and equal to the offering price. It was the largest percentage drop in the shares in three months and the largest fall among U.S. bank stocks on Thursday.
Citi"s shares recovered slightly in late morning trading but still trailed other U.S. banks: the KBW Banks Index .BKX was down just 0.7 percent.
"It"s a disaster," said William Smith, chief executive officer of Smith Asset Management in New York.
Citi shares closed at $3.45 on Wednesday. The third-largest U.S. bank by assets sold $20 billion of stock and convertible bonds after the market closed on Wednesday, raising funds to repay a government bailout.
The offering priced 20 percent below Citi"s $3.95 share price of last Friday, before the bank announced plans to repay the government.
The U.S. Treasury will sell its stake in Citigroup within the next 12 months, after an initial 90-day "lock-up" period, said Herbert Allison, Treasury assistant secretary for financial stability, on Thursday. ID:nN17375600
The Treasury delayed its plan to sell its $5 billion Citi shares based on the price of Wednesday"s offering, a spokeswoman said in a statement on Wednesday. ID:nN17169986
"The fact the government did not sell their stake was a sign there was really limited market appetite," said Nick Kalivas, vice president of financial research & senior equity index analyst at MF Global in Chicago.
"Now you have this government share sale hanging over the market," he added.
WELLS, BANK OF AMERICA
Smith said Citi suffered by launching its offering after Wells Fargo & Co sold $12.25 billion in stock on Tuesday and Bank of America Corp two weeks ago sold $19.3 billion in stock. Both those banks were also seeking to repay government bailouts.
Bank of America and Wells Fargo completed their offerings shortly after announcing them. Bank of America took two days to price its offering; Wells Fargo took one.
Citi"s management team, led by Chief Executive Vikram Pandit, should have moved faster after announcing the offering Monday morning, Smith said.
Bank of America"s offering priced about 5 percent below the previous day"s close, while Wells Fargo"s priced about 2 percent below their closing price the previous day.
Citi management can be faulted for not moving quickly, but it was a large deal and was complicated by the government"s involvement on several fronts, said Gary Townsend, chief executive of Hill-Townsend Capital.
"There were plenty of problems with this deal," said Townsend.
Earlier this year the government agreed to convert $25 billion of its Citi preferred stock into common stock, to further strengthen the bank"s capital levels.
Citi was anxious to repay the government bailout and escape executive compensation restrictions tied to the funds.
Spreads on Citi"s 6.01 percent notes due in 2015 widened by 17 basis points to 299 basis points over Treasuries.
Normally, bondholders benefit when a company raises capital, but creditors are concerned that Citigroup may not yet be able to stand on its own, said Sean Egan, principal at Egan-Jones Ratings Co in Haverford, Pennsylvania.
The shares recovered slightly in late morning trading to $3.23, down 6.4 percent.


Clic here to read the story from its source.