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Shaky start for UniCredit rights issue

Shaky start for UniCredit rights issue
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Shares in UniCredit slumped again on Monday— so much that they were briefly suspended from trading on the Milan Stock Exchange — as Italy’s biggest bank moved to increase its reserves by selling 7.5 billion euros worth of shares at a big discount.

The rights, which entitle their holders to buy those new shares went on sale on Monday, and there was little interest from investors.

The Italian bank’s shares have lost 37 percent since it announced the capital increase.

That fuelled concerns that other lenders may be deterred from using rights issues to address their capital shortfalls.

UniCredit’s rights issue is a litmus test for banking stocks at a time when many European lenders are under pressure to shore up their capital in order to withstand the spreading debt crisis.

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