* FTSEurofirst 300 dips 0.1 pct
* Portugal's PSI rises 1.7 pct, boosted by BCP, BES
* Hugo Boss falls after share placement
* Ahold down after below-forecast profit
By Francesco Canepa
LONDON, May 28 Portuguese shares outperformed
mostly flat European equities on Wednesday, bolstered by
reassuring signs from the country's largest listed banks.
Most other major European indexes hovered close to
multi-year highs, with falls in fashion brand Hugo Boss
and consumer group Ahold keeping the
pan-European FTSEurofirst 300 in check.
Lisbon's PSI 20 index, however, rose 1.7 percent,
with the country's No 2. bank Millennium bcp up 3.5
percent after announcing it had repaid state loans held in
contingent convertible bonds (CoCos).
The move, which had to be approved by the Portuguese central
bank, was interpreted as a sign of confidence on the bank's
health ahead of the European Central Bank's asset quality review
"It shows BCP is in a comfortable situation," Andre
Rodrigues, an analyst at Caixa Banco de Investimento, said.
"It means that the central bank of Portugal considers that
BCP has enough capital, not only to replay those 400 million
euros of CoCos but also to pass the AQR test."
Rodrigues also welcomed a successful placing of subscription
rights in Portugal's largest bank, BES, as part of a
1.045 billion euro capital increase. Shares in BES jumped 5.1
The broader FTSEurofirst 300 index of top European shares
was off 0.1 percent at 1,377.67 points by 1026 GMT, after
hitting its highest level in more than six years on Tuesday.
The index has been supported by an improvement in economic
data from the United States and expectations for more policy
easing by the European Central Bank (ECB).
Dutch supermarket chain Ahold slipped 3.3 percent
to the bottom of the FTSEurofirst after reporting lower margins
in the United States and the Netherlands, its main markets.
"The market has some potential to rise further in the summer
after recent gains, but equities are clearly not that cheap
anymore," Gerhard Schwarz, head of equity strategy at Baader
Bank in Munich, said.
"We might face some headwinds going forward as earnings
expectations for the second half are too ambitious and could be
revised down and economic growth might moderate next year."
Shares in fashion group Hugo Boss fell 2 percent to 103.70
euros after a source familiar with the transaction said private
equity group Permira had placed a 5.6 percent stake in
the fashion group with institutional investors at 101.50 euros
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up
(Additional reporting by Atul Prakash; Editing by Susan Fenton)