DealZone

Stress Management

April 24, 2009

SPAIN/Perhaps the best that can be hoped for from the upcoming week of stress test anxiety is that once it is over, a modicum of uncertainty will be gone as well. Sometime today, we should know how heavy the yardstick used in the tests was. The banks either already know or will soon find out whether they passed, and on May 4, expect all kinds of whooping and hollering outside the Deans’ office when the results are officially posted. Of course, there is a pretty good chance that as the banks find out the test results, the news will find a way out, so May 4 may turn out to be somewhat anti-climactic.

What happens next is still a bit vague. There is much talk about officials force feeding more funds to stressed-out banks. And despite the bad press on shotgun marriages — what with NY AG Andrew Cuomo stomping his feet over alleged pressure applied to Ken Lewis for Bank of America to take over Merrill Lynch — financial matchmakers will certainly look at the failures as prime candidates for synergistic harmonization.

But for the optimist, the market truism that the end of uncertainty is always a good thing could come as a welcome spring break for the troubled financial sector.

(PHOTO: A man hits a punching bag depicting a “boss”, as part of a test to measure his stress level, in a Madrid hotel July 3, 2007. Spanish hotel chain NH organized the promotional event which involved the smashing up of one floor of the hotel before its remodeling.  REUTERS/Sergio Perez)

Deals of the day:

* Italian power-grid operator Terna SpA sold a 66 percent stake in its Brazilian unit for 2.33 billion reais ($1.06 billion) to Brazilian power firm Cemig, as it focuses on developing the grid.

* China Huiyuan Juice said it is unaware of the source of news reports that suggested Coco-Cola has resumed discussion with the company.

* Shares in Italian Internet service provider Tiscali SpA were up 10 percent in early trading after MF newspaper said it expected to get a binding offer from British telecoms group Carphone Warehouse for its British assets.

* The Irish government is likely to take further shareholdings in the country’s banks, the Irish Times newspaper quoted a cabinet minister as saying.

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