The 12 Stocks That Will Get Hammered When Europe Is Forced To Restructure

Damocles Sword

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A Greek debt restructuring is looking more likely by the day, and with it the chance of severe contagion across Europe. If all PIIGS members see their debt restructured, Societe Generale analysts believe the Euro Stoxx 50 could lose as much as 50% of its value.Here are the details of Societe Generale’s debt restructuring scenario:

  • A debt recovery rate of 80%
  • A profit decline for two years due to fiscal tightening
  • The euro falls against the dollar
  • Bond yields rise, but the rise is contained by fears of another recession

If this restructuring scenario plays out, it will slam many of Europe’s biggest banks and insurers for significant losses.

Check out the European stocks that would be hit the worst here >
Note the hit the IBEX (Spain) and FTSEMIB (Italy) are projected to take in the event of PIIGS debt restructuring:

Chart

[credit provider=”Societe Generale”]

And while, right now, a Greek debt restructuring seems the only likely such event, the possibility remains that restructuring programs could be pushed on Ireland, Portugal, Spain, and Italy if the experience with Greece is not catastrophic.

It’s important to note that Greek and Portuguese stocks are not represented in the Euro Stoxx 50, and so it may take a restructuring in Spain for leaders to recognise the negative impact of such moves on equity markets.

[slideshow]
[slide
permalink=”12-deutsche-bank-1″
title=”#12 Deutsche Bank”
content=”Correlation: -39.1%

Current Stock Price: €42.10

Note: The larger the negative correlation, the more likely the company’s stock price is to fall in the event of a European restructuring.

Source: Societe Generale
image=”http://static.businessinsider.com/image/4b58d17a0000000000af33e3/image.jpg”
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[slide
permalink=”11-credit-suisse-2″
title=”#11 Credit Suisse”
content=”Correlation: -41.9%

Current Stock Price: €36.50

Note: The larger the negative correlation, the more likely the company’s stock price is to fall in the event of a European restructuring.

Source: Societe Generale
image=”http://static.businessinsider.com/image/4b1950240000000000995b29/image.jpg”
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[slide
permalink=”10-kbc-group-3″
title=”#10 KBC Group”
content=”Correlation: -43.9%

Current Stock Price: €28.60

Note: The larger the negative correlation, the more likely the company’s stock price is to fall in the event of a European restructuring.

Source: Societe Generale
image=”http://static.businessinsider.com/image/4c1b9caa7f8b9a5257580000/image.jpg”
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[slide
permalink=”9-generali-4″
title=”#9 Generali”
content=”Correlation: -44.3%

Current Stock Price: €15.80

Note: The larger the negative correlation, the more likely the company’s stock price is to fall in the event of a European restructuring.

Source: Societe Generale
image=”http://static.businessinsider.com/image/4dd674ed49e2aea656040000/image.jpg”
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[slide
permalink=”8-credit-agricole-5″
title=”#8 Credit Agricole”
content=”Correlation: -46.4%

Current Stock Price: €10.80

Note: The larger the negative correlation, the more likely the company’s stock price is to fall in the event of a European restructuring.

Source: Societe Generale
image=”http://static.businessinsider.com/image/4dd67545ccd1d525361a0000/image.jpg”
caption=””
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[slide
permalink=”7-unicredit-6″
title=”#7 Unicredit”
content=”Correlation: -46.9%

Current Stock Price: €1.60

Note: The larger the negative correlation, the more likely the company’s stock price is to fall in the event of a European restructuring.

Source: Societe Generale
image=”http://static.businessinsider.com/image/4cf3f48bcadcbb6501190000/image.jpg”
caption=””
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]
[slide
permalink=”6-axa-7″
title=”#6 AXA”
content=”Correlation: -49.1%

Current Stock Price: €14.50

Note: The larger the negative correlation, the more likely the company’s stock price is to fall in the event of a European restructuring.

Source: Societe Generale
image=”http://static.businessinsider.com/image/4dd675794bd7c8004b000000/image.jpg”
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[slide
permalink=”5-ing-group-8″
title=”#5 ING Group”
content=”Correlation: -49.8%

Current Stock Price: €8.40

Note: The larger the negative correlation, the more likely the company’s stock price is to fall in the event of a European restructuring.

Source: Societe Generale
image=”http://static.businessinsider.com/image/4dd675be49e2ae1053100000/image.jpg”
caption=””
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[slide
permalink=”4-bnp-paribas-9″
title=”#4 BNP Paribas”
content=”Correlation: -51.3%

Current Stock Price: €53.40

Note: The larger the negative correlation, the more likely the company’s stock price is to fall in the event of a European restructuring.

Source: Societe Generale
image=”http://static.businessinsider.com/image/4c1ba64c7f8b9a9d5aa00000/image.jpg”
caption=””
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credit_href=””
]
[slide
permalink=”3-intesa-sanpaolo-10″
title=”#3 Intesa Sanpaolo”
content=”Correlation: -52.3%

Current Stock Price: €2.00

Note: The larger the negative correlation, the more likely the company’s stock price is to fall in the event of a European restructuring.

Source: Societe Generale
image=”http://static.businessinsider.com/image/4c1b9e567f8b9af669c30100/image.jpg”
caption=””
credit=””
credit_href=””
]
[slide
permalink=”2-bbva-11″
title=”#2 BBVA”
content=”Correlation: -56.7%

Current Stock Price: €8.10

Note: The larger the negative correlation, the more likely the company’s stock price is to fall in the event of a European restructuring.

Source: Societe Generale
image=”http://static.businessinsider.com/image/4c1b9d817f8b9a9178380000/image.jpg”
caption=””
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[slide
permalink=”1-santander-12″
title=”#1 Santander”
content=”Correlation: -58.0%

Current Stock Price: €8.10

Note: The larger the negative correlation, the more likely the company’s stock price is to fall in the event of a European restructuring.

Source: Societe Generale
image=”http://static.businessinsider.com/image/df7a6c799a7d46499ef70800/image.jpg”
caption=””
credit=””
credit_href=””
]
[slide
permalink=”more-concerned-about-what-happens-with-greece-13″
title=”More concerned about what happens with Greece?”
content=”Here’s who gets slammed in a Greek debt restructuring >
image=”http://static.businessinsider.com/image/4b2f93440000000000c0612c/image.jpg”
caption=””
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[/slideshow]