Portugal Telecom, Jerónimo Martins, Mota-Engil and Millennium BCP were the listed companies that suffered the largest losses on the Lisbon stock exchange during October.
The exchange has witnessed seven months of share price falls for Portugal’s major companies in the longest cycle of losses since the 11 month period ending January 2012.
The Lisbon Stock Exchange reported losses of 9.03% in the top 20 companies stock value during October. All of these listed companies closed the month with losses, with seven of the 18 listed losing 10% or more.
These are the sharpest falls since July (-12%), when Banco Espiríto Santo was in deep trouble and eventually was bailed out on August 3, but the collateral damage was done.
Portugal Telecom sank the most during October - 21.55%, and now is worth a tempting €1,171 million – tempting that is for a predator, the sharks are circling with a successful bid from a French group Altice the favourite option. Uncertainty over the future of its partner Oi, contributed to its share crash. Between Zeinal Bava leaving on October 8 with a suspiciously large pay-off and the 22nd of October PT fell an astounding 40.19%.
Since then the PT share price has recovered 32% as at October 31. This rise was due to the positive performance of Oi on the São Paulo stock exchange rather than anything PT has managed to achieve.
Another company to suffer a fall was Jerónimo Martins, owner of the Pingo Doce supermarket chain, which has fallen 19.95% to a valuation of €4.391 billion.
The food group suffered a 15% drop in profits during the first nine months of the year. The fall in food prices in Portugal and Poland, the company’s key markets, contributed to a decrease in its net income even though sales increased.
Then there is Mota-Engil. The construction and logistics company lost 18.26% of its value in October, and now is worth €855.4 million.
Millennium BCP lost 13.15% in October and now is worth €4.877 billion. The bank failed the Euro stress test in October and is to submit a recovery plan to the European Central Bank in November.
Energy and paper group Semapa fell only 0.52% and EDP dropped only 0.69%. All the others fell more than 3%, and of the 18 companies that make up the main stock index, seven depreciated by at least 10%.
So much for the healthy corporate sector that is driving the country's resurgence but let's not feel to sorry for the owners. The share prices may be down but their tax arrangements will compensate.
Many of the top 20 companies have headquarters outside Portugal for tax reasons, ie they pay less of it to the country in which they operate - Portugal.
The holding company of the Soares dos Santos family sold Jerónimo Martins to one of its subsidiaries headquartered in the Netherlands and several other Portuguese companies have done the same.
The family holding of Belmiro de Azevedo, owner of Sonae and the telecoms company Sonaecom, has several companies headquartered in the Netherlands which own shares in Sonae and Sonaecom.
Pedro Queiroz Pereira owns more than 75% of the pulp and paper company Portucel, through Semapa. Seinpar Investments BV, fully owned by Semapa, has its headquarters in Amsterdam.
Portugal Telecom also has several shareholders like Controlinveste International Finance and RS Holding which are headquartered in the Netherlands and Luxembourg respectively and famously, Espírito Santo International based in Luxembourg..
Amorim Energia BV is also another such case. The utility company owned in part by businessman Américo Amorim holds a share in the Portuguese oil company Galp Energia but is based in the Netherlands.
So, not all bad news then, at least not for the owners.
Comments
Consider a Burundian arguing with a Portuguese over which country is more backward, poorly governed and most corrupt.
And the Burundian saying ... 'OK I accept your special people taking 30 million euros out of a deal to buy 2 submarines is a good scam.
But that is only because we are a thousand kms inland and have no sea front. So a bit difficult to explain to the World Bank why we would need submarines.'
Talking of front though - We Burundians have a saying - 'You Portuguese have more front than Harrods'.
No it doesn't mean much to me either - but maybe it was being said by British explorers - that Livingstone fella for example - before we became French.
But you ask - what's a Harrod ? Is it edible ?
Whether in the fraud cases against Municipal Presidents, or even in Parliamentary enquiries .. time and again papers have usefully 'gone missing' or cannot be proved to make a decison.
And if the proof is too strong - too obvious against someone important - then a Portuguese judge is perfectly content to dismiss it as prejudging .... prejudicing .... his decision.
As we all saw with the multi-million euro Submarine bribes enquiry; evidence of wrongdoing was sufficient for a German judge to condemn Germans but was thrown out by the Portuguese judge.
Partly on the grounds that this was private information that should not have been in the public domain !! And partly too prejudicial !
Always remind yourself .... that sadly this is not just Portugal's failure. It is an example of a European Union member states justice !
The EU's weakest link ... ?
Both religions also have priesthoods – positioned between God and Man. That accustoms a citizen to accept inequality. Without the priesthood they cannot understand God / Allah's Will. Without an Elite there would be chaos – don't question it.
But equally the disadvantaged have been judged by God /Allah. They are 'born to fail'. In some way they are 'deficient' – as indeed are any with physical, mental or emotional 'abnormalities'. Witness so many Portuguese not challenging the 'system' here – just leaving. As they have done for centuries.
distributions in Europe and poverty levels are high. (p.4. OECD Portugal report October 2014)
Certainly gaps between rich and poor are in all countries but surely - after 30 years in and around the EU - why has Portugal not only let the gap get so wide but worst, has done so little to help its poor and disadvantaged ?
Around 1/4 children in Portugal now grow up in extreme poverty. OK, a distinct improvement on pre-EU days but still a woeful lack of interest in the disadvantaged by the advantaged.
Sure, each Freguesia and Municipal have community centres but to do what in ? Where are the day, afternoon and evening classes to help educate the ordinary citizens to this new world ? Or to socialise ?
To train up new business owners ? To protest and agitate for change ? We well remember several years ago offering some of our spare UK clothes to the Freguesia only to be told that in Portugal we do not give away our old clothes !
Now apparently ... the Portuguese do ! But why take so long learning what developed countries have been doing for years ?