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European Banks Tumble After Unnamed Investor Sells Large Stakes in Deutsche Bank and Commerzbank

Stock Markets Apr 12, 2022 18:44
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European stocks are down today after an undisclosed investor sold significant stakes in some of the largest banks in the region.

The STOXX Europe 600 index slipped 1.2% in the morning, while the German DAX and the banking market declined by 1.8% and 2.3%, respectively. According to the reports, an undisclosed investor offloaded large stakes in Deutsche Bank (DE:DBKGn) and Commerzbank (DE:CBKG) (OTC:CRZBY).

The sale reportedly includes 116 million shares of Deutsche Bank and 72.5 million shares of Commerzbank, which translates to over 5% of the two banking giants.

Deutsche Bank said it feels “confident” about its strategy after its shares initially fell 9.5% before recovering.

“As we said during our investor day, we have had a promising start into the year and our objectives remain unchanged,” said a Deutsche Bank spokesperson.

According to Bloomberg data, only two investors have large enough stakes for a sale of this scale including BlackRock (NYSE:BLK) and Capital Group. However, BlackRock is mainly a passive investor whose stake is related to Deutsche Bank’s membership in multiple stock indexes and cannot be sold as one.

Nigel Bolton, a co-chief-investment officer at BlackRock Fundamental Equities, said that traders should pay close attention to large investor flows.

The sharp selloff in European banks comes on the heels of significant stake sales in the likes of E.ON (OTC:EONGY), Airbus (OTC:EADSY), London Stock Exchange Group (LON:LSEG), and Glencore (OTC:GLNCY), among others.

The decline in the European market comes ahead of the U.S. consumer price index reading for March on Tuesday, and the producer price index a day later.

Furthermore, the Wall Street banking giants including JPMorgan (NYSE:JPM), Goldman Sachs (NYSE:GS), Wells Fargo (NYSE:WFC), Citi (NYSE:C), and Morgan Stanley (NYSE:MS) are set to report financial results as the earnings season begins this week.

European Central Bank (ECB) policymakers are due to meet on Thursday in Frankfurt to work on their monetary policy strategy.

By Senad Karaahmetovic

European Banks Tumble After Unnamed Investor Sells Large Stakes in Deutsche Bank and Commerzbank
 

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