Stock market stupidity and spin forces produced yet another totally unwarranted leap in DB’s share price yesterday.
The men around John Cryan are in grave danger of using up what little stock market goodwill they have left. And several reports plus insider sources suggest that Cryan himself may soon be in the firing line.
Another day, another Dollar, another Deutsche scam. The German finance ministry was working frantically on a bailout plan for the bank, then it wasn’t. It had a deal with the DoJ, then it didn’t.It was ‘set to win back US share of other banks’, then it was scaling down its American business.It had the confidence of the Qataris, then it didn’t.
Yesterday, an investment dream team of Qatar, Abu Dhabi and China were about to up their stake from 10% to 25%. Today, it seems, they aren’t.
Barely ten hours ago, the Telegraph was posting that ‘Deutsche Bank shares climbed as much as 4.2pc after Germany’s Manager Magazin reported that members of Qatar’s royal family had struck an informal agreement with the Gulf state’s sovereign wealth fund, Abu Dhabi, and an unnamed Chinese investor to lift their combined stake to as much as 25% if the lender decides to tap shareholders for more funds’.
But then, Frankfurter Allgemeiner Zeitung (FAZ) said no, the Middle East investors ‘see no reason’ to up their stake. Yes, it’s that clear.
This morning, I’m tending towards the view that there is actually no ‘new news’ about what or who might keep the titanic bank afloat.
So desperate are the Deutsche managment to steady the share price, they’re now resorting to the presentation of old stories as new stories.
Manager is part of the Spiegel Group….one of the original sources (October 7th) of the ‘Qataris to upgrade their DB investment’ spin. Indeed, at that time it Spiegel suggested
‘….it appears that the low share price is encouraging the sheikhs to invest even more now that it wouldn’t take more than a few billion for them to gain control of Deutsche Bank. Information obtained by SPIEGEL indicates that the al-Thani cousins are considering propping up the bank with a fresh capital infusion and purchasing a blocking stake of 25 percent together with other investors….’
This was hastily denied by the Qataris, who said merely that they were ‘discussing their options’. So the story has now been recycled in fellow publication Manager (a monthly): but forces somewhere presented it to the world as big news. The Gulf Times cheekily commented that Manager ‘reported the development, but didn’t cite anyone’.
The DB share price immediately shot up 4.2%.
Setting aside the appalling ethical behaviour of Deutsche Bank thus far – nobody should be surprised that double dealing and dark arts are still part of its stock in trade – there is a growing sense of unease among opinion leaders and DB insiders about whether John Cryan is actually in control of events at all. Morale in the US office is at rock bottom, and employees in the German HQ are hardening their views about whether the CEO can survive.
Cryan has already said that the lender may have to deepen cost cuts and may fail to be profitable in 2016, but he isn’t leading either the markets or investors on this tack: the Qataris in particular have said on several occasions that they would indeed up their capital stake, but only as and when the bank’s management can come up with a real, focused strategic rethink and headcount programme.
The mendacious spin being trickled out by whoever is in charge of managing Deutsche’s image continues to conveniently ignore that reality: there will be a willingness to invest in the horse’s stamina, but first of all investors need to see a more aerodynamic, light and smaller cart.
We are now just six days away from the announcement of Deutsche Bank’s Q3 results for this year. Without a clear-up of the horseshit and more clarity about the direction, John Cryan may well be destined for the knacker’s yard.