UniCredit shares dive after emergency fundraiser

Shares in Italy's biggest bank, UniCredit, were suspended from trading before collapsing 10% today, after a 14.5% slump in the previous session following news of an emergency fundraiser.

Yesterday, the bank set a huge discount on a 7.5 billion euro rights issue which triggered an immediate crash in the share price.

Shareholders are being offered a deal which has the effect of cutting the value of their existing shares by 69%. Only 24% of its shareholders have so far expressed an interest in buying into the offer.

The extent of the shares slide triggered concerns about whether there was enough appetite among investors for the expected flood of other bank fundraisings expected in the coming months.

After today's plunge, Unicredit stock is now at its lowest value since January 1997. Its stock market value has dropped more than a third since it announced the planned fundraiser in November.

ING fund manager Paul Vrouwes told Bloomberg: "I expected a fall but not of this magnitude."