Saipem stages minor comeback after huge losses Wednesday

Shares gain almost 4% as Consob keeps short selling ban

Saipem stages minor comeback after huge losses Wednesday

Milan, January 31 - Share prices of Italian oil-service provider Saipem SpA on Thursday gained almost 4% following heavy losses Wednesday, when regulators announced a probe of unusual share sales shortly before the company announced a dramatic drop in forecast profits. On Wednesday financial market regulator Consob announced it would review the sale of almost 10 million shares in Saipem made after the close of trading on Monday, just hours before the company announced that its 2013 profits would be less than half the amount previously expected. By mid-afternoon Wednesday, shares in Saipem, Europe's biggest oil-service provider, had plunged a record 39% on Milan's stock exchange. In order to help sustain the company's shares Thursday, Consob banned short-selling on Saipem stock for the second day in a row. Meanwhile, investment banking units of HSBC and JP Morgan both cut their target price on Saipem stock Thursday to around 26 euros per share. Shares in Eni SpA, the Italian government-controlled energy giant which owns 43% of Saipem, also gained slightly Thursday (+0.6%), after shedding more than four percentage points on Wednesday. In an editorial in its Lex column Thursday, the Financial Times wrote that Eni should consider selling its stake in Saipem. The FT said that while Saipem's share performance was based more on worries about the company's current troubles than on any general sector issues, Eni should consider selling its Saipem stake unless it could exercise more stringent control over ''the unpredictable company''.

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