* FTSEurofirst 300 dips 0.3 pct
* Portugal's PSI rises 1 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 weaker European equities on Wednesday, bolstered by
reassuring signs from the country's largest listed banks.
Most other major European indexes traded flat or slightly
lower, while remaining close to multi-year highs. Declines by
fashion brand Hugo Boss and consumer group Ahold
weighed on the pan-European FTSEurofirst 300.
Lisbon's PSI 20 index, however, rose 1 percent. The
country's second-largest bank, Millennium bcp, gained
3.5 percent after announcing it had repaid state loans held in
contingent convertible bonds (CoCos).
The move, which had to be approved by Portugal's central
bank, was interpreted as a sign of confidence in the bank's
health before the European Central Bank's asset-quality review
"It shows BCP is in a comfortable situation," said Andre
Rodrigues, an analyst at Caixa Banco de Investimento. "It means
that the central bank of Portugal considers that BCP has enough
capital, not only to repay 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 4.2
The broader FTSEurofirst 300 index of top European shares
was off 0.3 percent at 1,375.60 points by 1416 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 ECB.
The MSCI Europe index of European shares has risen around 20
percent in the past year despite falling profit expectations,
leaving it trading at around 14 times its expected earnings for
the next 12 months, the highest multiple since 2005, Datastream
Dutch supermarket chain Ahold slipped 3.8 percent
to the bottom of the FTSEurofirst after reporting lower margins
in the United States and the Netherlands, its main markets.
"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 2.7 percent to 103
euros. Private equity group Permira has placed a 5.6
percent stake in the fashion group with institutional investors
at 101.50 euros apiece, a source familiar with the transaction
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 Larry King)