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

Tyler Durden's picture

Update: and rejected

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

And scene.

* * *

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?

For now it's working...

 

Although it may not last long. First, 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 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?

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Herd Redirection Committee's picture

Seems like the chicken and the egg.  Which comes first, the 'President's Working Group' pump, or the rumor?

Looney's picture

If you think Deutsche Bank’s $14 Billion fine is a lot of dough, take a look at THIS…

According to the Business Insider, the central African nation of Chad just fined oil giant Exxon Mobil $74 billion, as well as an additional $819 million in unpaid royalties.

By the way, Chad’s GDP in 2015, according to the CIA World Factbook, was just $10.88 billion.   ;-)

Looney

American Psycho's picture

Fake DOJ settlement data, capital raises, Qatar increasing their stake.  At this point, TPTB will do anything to maintain share price. 

American Psycho's picture

Just sit on the MARTA for a few minutes for some priceless entertainment.

Kagemusho's picture

Had my fill of former  denizens of St. Elizabeth's (mental institution)  riding all day long on the DC Metro. Nothing like sitting next to someone exhibiting clear evidence of 'short circuiting' as Hillary admitted to. 'Entertainment' becomes a matter of perspective very quickly.

Kagemusho's picture

Police found 60 rounds from four different guns, and an AK-47 rifle was found in some bushes near a parking lot.

Unless it was a full-auto AKM, it almost certainly wasn't as advertised. Fuqqin willfully ignorant  media can never get it right.

rz the 1st's picture

My guess is about 18,235 +/- 10 points

Lugnut's picture

"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."

Tyler, why are you presuming they are buying shares on the open market?

buzzsaw99's picture

they need someone to launder their money. lulz

Bokkenrijder's picture

Perhaps it's true? Remember Al-Waleed bin Talal bought a lot of Citibank shares when they were in trouble.

 

rosiescenario's picture

At what price level did they buy those shares? At market or discounted from it?

rosiescenario's picture

Well, that answers one question regarding the price action today.

 

So the "market" thinks that Qatar will buy DB stock at a higher price than where it is currently trading.

 

I'd think Qatar would be negotiating to buy stock at around the $5 level forcing a 50% dilution of all existing share holders.

asteroids's picture

You have to be a special kind of stupid to think that DB gets out of this without damage. This is rumor makers fucking around with computers to make a quick buck.

KnuckleDragger-X's picture

Well Lehman was liquid and fully funded and didn't THAT work out wonderfully......

SirBarksAlot's picture

Rolling, floating and dancing...Draghi and Cryan perform:

https://www.youtube.com/watch?v=fNKRm6H-qOU

Atomizer's picture

Good catch Tyler. Here we go again. /lol

THE CARS ? Good Times Roll - YouTube

 

rosiescenario's picture

....Golden Earring....Twilight Zone...that'd be my choice for these times....

 

 

"Twilight Zone"

(somewhere in a lonely hotel room,
There's a guy starting to realize
That eternal fate has turned its back on him,
It's two a.m...........)

It's two a.m., the fear has gone
I'm sittin' here waitin', the gun still warm
Maybe my connection is tired of takin' chances
Yeah there's a storm on the loose, sirens in my head
I'm wrapped up in silence, all circuits are dead
I cannot decode, my whole life spins into a frenzy

Help I'm steppin' into the twilight zone
The place is a madhouse, feels like being cloned
My beacon's been moved under moon and star
Where am I to go, now that I've gone too far
Help I'm steppin' into the twilight zone
The place is a madhouse, feels like being cloned
My beacon's been moved under moon and star
Where am I to go, now that I've gone too far
Soon you will come to know,
When the bullet hits the bone
Soon you will come to know, when the bullet hits the bone

I'm falling down a spiral, destination unknown
A double-crossed messenger, all alone
I can't get no connection, can't get through, where are you
Well the night weighs heavy on his guilty mind
This far from the borderline
And when the hit man comes
He knows damn well he has been cheated

spastic_colon's picture

nah....just another hillary debate victory setup; cant let things be too green today; the same idea as the november jobs report setup which will be FANTASTIC!

Keltner Channel Surf's picture

Four-hour delay, huh?   Must be another time zone issue.  I thought Citiadel's coders were gonna fix that ...

MASTER OF UNIVERSE's picture

Kardashian BIG FAT ASS will come to the rescue for Deutsche if the Greater Fools don't buy the spin.

Squid Viscous's picture

meanwhile Honeywell is down almost 10%, another Cramer fave...

onwisconsinbadger's picture

Lehman again. They raised dividend and Hank Greenberg was buying shares before collapse. Unfotunatley this time is different. Janet will make sure DB does not go under.

Spungo's picture

A lot of sketchy companies and trusts do that. Poorly managed REITs will have payout ratios above 100% in hopes of goosing the stock price, and then they use the stock price to raise capital by selling stock. It's like a reverse ponzi scheme. The people who buy first get fucked the most. That trick eventually stops working, they cut the dividend by maybe 30%, the stock absolutely plunges.

Look up Dream Office REIT on the TSX. Ticker is D-UN.TO. Dividend was cut from 19 cents to 13 cents, and it's still at or above 100% payout ratio. Some people just fucking suck at running a business.
https://www.google.com/finance?q=TSE%3AD.UN&ei=gdL3V4nEIMT2jAGTt67QDg 

aliens is here's picture

Sick of Germans. Moozies should take them over.

aliens is here's picture

Sick of Germans. Moozies should take them over.

thx111's picture

I thought DB would be finished in few more weeks last Thursday, but rumors have been keeping the dead bank alive.

When I looked at the Leaman/DB chart carefully, I realized that we still have few more months until the end.  I should sit back and just relax.

Paul Morphy's picture

System cannot afford DB to fail/collapse.

 

In that scenario there are only three options : bailout, bailin, new non-national investment.

Bailin would be political suicide

Bailout is against Eurozone rules (sovereign bailouts ain't allowed no more - course that rule can always be changed)

This leaves option 3 : new non-national investment. I doubt that there is any sane investor who'd invest the capital needed to rescue DB from where it finds itself right now. Die diligence on derivatives alone would tell any potential investor to run without looking back. I also doubt that there is any German appetite to let a foreign national investor gain a controlling stake in the only German international bank.

I think we wil see Germany changing Eurozone rules on sovereign bailouts and the german citizen being asked to fund sovereign bonds to raise capital to rescue DB

 

 

tarabel's picture

 

 

Option # 4 Non-sovereign investment fund buys some or all of DB stock. Central banks buy shares of non-sovereign investment fund.

Voila! No government bailout.

Tremel Jackson's picture

DB in talks to buy TWTR in order to start own rumors— cutout Friday rumor middleman.

Paracelsus's picture

 

        Umm,Isn't Qatar one of the big supporters of the anti-Assad,CIA,Mossad,

   Al-Queda mob of head choppers,trying to get a pipeline going thru Syria so

   that Europe won't need to rely on the Russian gas going thru the Ukraine?

    Funny how all these small Emirates have well paid ex-SAS fellows for palace 

    bodyguards.Almost as if they don't trust their own people?!

      If the West keeps mucking about in the mideast,war with Russia is looking 

   much more likely now than several years ago.

     Obama and the US State Dept.are going to get us all killed.... 

       I wonder how many women would support Hillary if they knew she supported

    the same bastards who enjoy cutting off womens clitorises on a daily basis (FGM).

    What we need is a quarter of the planet ring-fenced and all the men and women who

    prefer Allah can happily live there,and be left alone.

 

rosiescenario's picture

Is DB employing that same PR firm that did the Pentagon videos?

walküre's picture

jaja.. so so ... die Scheichs again... giving welfare to a big bank

I guess the German DAX Tunten declined the request for funding? No circle jerk between ECB, DAX Cos. and DB? Nein? Mutti says NEIN no matter what. She will give money to Erdogan. They probably blowing each other when they're not sucking on da Hookah. Mutti's idea to give money to Erdogan so he could prop up DB didn't work out? She must have been severely stoned to believe that would work.

Mutti said she regrets that the borders are closed and that there's a fence now between Greece and Macedonia. She would like to see more and more invaders. Mutti needs a hole in her head or a necktie. What a fucking traitor this woman is.

Back to DB.. they're slashing 1,000 people. Commerzbank is slashing 9,000 jobs. What's going on in Germany? Banks not making money? Maybe get out of EU and raise interest rates to a level where banks can afford to pay salaries? Oh, the concept.

Don't put a dime into the EU banks. No way the Arabs are going to commit financial suicide like that. They're dealing with their own funding issues.

 

voxpopuli's picture

... don't know why, but this to me will imemdiately translate in even more mosks and freeloaders immigrants ...

monad's picture

Arm the Germans. Really.

rosiescenario's picture

....and a new rumor is circulating to boost DB's stock price.....

 

Gartman sez to short DB...go all in....

Phillyguy's picture

The manipulators on Wall St managed to have the Dow jump 160 points last week on (what now appears to be false) reports that the US DOJ was reducing DB fine from $14 billion (roughly the size of Apple’s tax bill to Brussels) to $5.4 billion. As we now know, this rumor was circled to drive the stock market higher- read blatant market manipulation. Is this being continued with Qatar being rumored to increase their stake in DB?

Simply_Lucky's picture

Lol! This comparison of Deutsche and Lehman reminds me of the "Simpsons did it" episode in Southpark. :)
https://m.youtube.com/watch?v=iDuMp2kDxos

Paracelsus's picture

 

      Kerry will suggest a Syria No-Fly-Zone at the UN and then we will have ww3 within

     a week or two.

      Odd that the world press did not cover the forty some Intel spooks blown up by the Russian

     missles slamming into the bunker on the Turkish/Syrian border.

       Where are the independent journalists out there? Is everyone on the CIA's pad?

     OT but I wanted to say that the vote of the Secret Service details for Hillary is not good.

     If anyone knew closeup what kind of person she is,the real Hillary,they would be shocked.

      She swears like a sailor, is clearly power mad, and makes Donald Trump seem sane by comparison.

     All of her security staff think she is beneath contempt, and needs a proper waterboarding.

       Is it possible that her neurological illnesses have changed her behaviour or is this her

      ordinary attitude to her staff?

 

 

cognitive dissident's picture

wake me when Merkel agrees to take a shit on Cryan's chest in that "German" way...

bluskyes's picture

I thought a bunch of Deutsche bluechip companies were going to donate cash.

aliens is here's picture

It'll come with string attached. All you German women needs to wear burkas.