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.
