October 25, 2017 / 7:13 AM / a year ago

Monte dei Paschi shares trade below bailout price in market return

MILAN, Oct 25 (Reuters) - Shares in Monte dei Paschi di Siena on Wednesday fell below the price the state paid to bail out Italy’s fourth-largest bank as they resumed trading after a 10-month hiatus.

Shares in the world’s oldest bank last traded in Milan in December 2016 when Monte dei Paschi had to turn to Rome for help after failing to find buyers for a 5 billion euro ($6 billion) share issue needed to keep it afloat.

Shares in the Tuscan bank opened at 4.10 euros, which will be the reference price for the day, and then rose to just below 4.30 euros before trading was halted due excessive volatility.

That price is in line with the 4.28 euro level at which the stock was valued last month during an auction held to set the payment due to investors who bought insurance against the bank’s default.

But that price is well below the 6.49 euro price paid by the state in August when it injected 3.85 billion euros into Monte dei Paschi, implying a large paper loss for the country’s taxpayers. (Reporting by Valentina Za; editing by Agnieszka Flak)

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