Troubled Portuguese bank Espirito Santo enjoyed a surprise turnaround in its share price yesterday, after the UK’s Financial Conduct Authority banned short selling of the stock in London.
The British regulator’s action followed a similar move by the Portuguese regulator, the Securities Markets Commission (CMVM).
Investors had fled the stock when Luxembourg announced a probe into three holding companies of the Espirito Santo family, the bank’s biggest shareholder.
The family had been the majority owner until a round of capital-raising this year diluted its stake in the lender.
Despite supportive statements from the country’s finance ministers about the strength of the bank’s capital position, shares dived 26 per cent on Friday.
They continued to fall into this week, but bounced back yesterday – its shares rose 7.66 per cent to close at €0.689.
However, the share price remains at barely half of this year’s peak of €1.35 in early March.
The bank’s chief executive, Ricardo Espirito Santo Salgado, has stepped down to be replaced by chief finance officer Amilcar Morais Pires.
The change will be voted on at a shareholders’ meeting at the end of this month.