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Rumor Of Qatar Investment In Deutsche Bank Denied; Speculation Of A $1.2 Billion Margin Call Remains

Friday, October 7, 2016 10:51
% of readers think this story is Fact. Add your two cents.

(Before It's News)

Update: and rejected

  • QATAR SAID UNLIKELY TO RAISE STAKE IN DEUTSCHE BANK:
    REUTERS

And scene.

"http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/10/01/20161007_db3.jpg"
target="_blank"> "http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/10/01/20161007_db3_0.jpg"
style=" width: 500px; height: 344px;" width="500" />

* * *

Last Friday a fake Deutsche Bank headline saved the market.
Can they do it again?  It appears
that just like a certain Saudi prince took a bath in Citi sevearl
years ago, a greater fool has been found again, according to
Spiegel:

  • *QATAR SAID TO CONSIDER RAISING STAKE IN DEUTSCHE BANK
    TO 25%

Remember when Korea’s SWF was going to take a stake in
Lehman?

"http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/10/01/20161007_db2.jpg"
target="_blank"> "http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/10/01/20161007_db2_0.jpg"
width="500" />

For now it’s working…

"http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/10/01/20161007_db.jpg"
target="_blank"> "http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/10/01/20161007_db_0.jpg"
width="500" />

Although it may not last long. First, "text-decoration: underline;"> "http://www.reuters.com/article/us-germany-deutsche-bank-qatar-idUSKCN127111"
target="_blank">the story is 4 hours old..

Qatari investors who own the largest stake in Deutsche Bank do
not plan to sell their shares and could consider buying more if the
embattled German bank decides to raise capital, sources familiar
with Qatari investment policy told Reuters.

Funds controlled by Qatar’s former Prime Minister Sheikh Hamad
bin Jassim al-Thani bought 6.1 percent of Deutsche in mid-2014 and
increased their stake to just under 10 percent, including options,
in July this year.

Second, what DB needs is to raise
capital; it can only do that by selling shares to Qatar directly,
and not for the Qatari investors to buy stock in the open market,
of which DB would see precisely zero in proceeds.

Third, by announcing their intentions to buy the stock ahead of
actually doing so, Qatar guarantees it will pay much more for the
same “25% stake”. Brilliant.

Fourth, and final, as Reuters reports, the Qataris have so far
lost, on paper, over $1.2 billion on their investments in the bank.
It is therefore far more likely that Qatar is using first Reuters,
then Spiegel, to get the price as higher as possible – just like
the rumor spreaders last week used AFP – to that they can sell into
the bid.

Especially, when one considers the "http://www.bloomberg.com/news/articles/2014-06-04/deutsche-bank-s-qatari-backer-said-to-hold-2-billion-loan-talks"
target="_blank">following story from 2014
:

The man who is providing Deutsche Bank AG with a 2.1
billion-euro ($2.9 billion) cash infusion, and a vote of
confidence
, held talks with banks about getting a loan to
finance the investment and to hedge it. Former Qatari Prime
Minister Sheikh Hamad Bin Jassim Bin Jabr Al Thani was approached
by banks offering loans to fund the purchase as well as derivatives
to protect him from losses on the shares he purchased, said four
market participants who asked not to be identified because they
weren’t authorized to speak publicly. Two of the
participants said they were told Qatar National Bank agreed to
provide a $2 billion margin loan.

An official at Sheikh Hamad’s office in Doha declined to comment
on the talks, as did representatives for Qatar National Bank and
Frankfurt-based Deutsche Bank. If Sheikh Hamad’s investment turns
out to have been structured to limit his financial risk in the
stock, that would be a red flag, according to Peter Hahn, a finance
lecturer at London’s Cass Business School.

“That should be a concern for all Deutsche Bank
shareholders,” Hahn said. “What sounded like a vote of confidence
may be a hedged bet.”

In a margin loan, a borrower pledges an asset to obtain money
and typically agrees to hand over cash to the lender if the value
of the collateral declines. The lender typically can sell some of
collateral if the borrower is unable to post cash.

“There’s a
growing trend among sovereign wealth funds to buy on
margin
,”
said Bernardo Bortolotti, director of the
Sovereign Investment Lab, a research unit at Bocconi University in
Milan. “An investment of this magnitude is rare, and it’s likely to
attract significant interest for financing from banks seeking
fees.”

Instead of “voicing confidence” in DB, is Qatar just just trying
to find a way to get rid of what may be a rather pesky $1.2 billion
margin call?

"http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/deutsche%20bank%20teaser%202.jpg?1475857830" />

"http://feeds.feedburner.com/~r/zerohedge/feed/~4/9kxpPbrCpvY"
height="1" width="1" alt="" />



Source: http://silveristhenew.com/2016/10/07/rumor-of-qatar-investment-in-deutsche-bank-denied-speculation-of-a-1-2-billion-margin-call-remains/

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