Shares of Jefferies Group caught bids after the company reported that its trading positions in the sovereign securities of the nations of Portugal, Italy, Ireland, Greece and Spain have been reduced by an aggregate of approximately $1.1 billion long and $1.1 billion short. This represents a 49.5% reduction in Jefferies' gross holdings of these securities since the close of business last Friday and resulted in no meaningful profit or loss on its trading activity or their remaining positions, which continue to be substantially matched by country and maturity.
Jefferies' current net exposure to these sovereign securities is currently $59 million, or 1.7% of shareholder equity, with negligible market or credit risk. "We undertook this reduction in our holdings solely to demonstrate the liquid nature of this market-making trading book," said Richard Handler, Chairman and CEO, and Brian Friedman, Chairman of the Executive Committee of Jefferies, in a joint statement.
Shares of Jeffries have been hammered in recent weeks as the market began to worry about the company’s Euro exposure. The recent bankruptcy of MF Global because of bad Euro bets focused the markets attention on related companies.
Jefferies Group (JEF : NYSE : US$12.24), Net Change: 0.17, % Change: 1.41%, Volume: 20,011,425
Canaccord Genuity Inc. is a global investment banking and institutional brokerage firm. Their website is www.canaccordgenuity.com.
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