Fannie, Freddie see share price run-up
Posted on: Monday, 24 August 2009, 16:27 CDT
Investors flocked to bailed-out mortgage lenders Fannie Mae and Freddie Mac Monday, pushing their share prices much higher, exchange data indicates.
The New York Stock Exchange listed Fannie Mae's closing price Monday at $1.70, up 41.7 percent, while Freddie Mac finished at $2.05 per share, up 32 cents, or 18.5 percent higher.
Analysts told CNNMoney.com that the U.S. government-backed mortgage giants benefited from run-ups in the share prices of financial companies such as AIG and Citigroup.
Paul Miller, analyst at FBR Capital Markets and Co., told CNNMoney, People see the financial stocks rising, and they say, 'Oh, the government has a piece of them, and they're doing well.' Investors are speculating that Fannie and Freddie will follow suit.
The two firms were the recipients of the biggest U.S. government bailout in history, with Fannie receiving $34.2 billion in direct taxpayer aid while Freddie pulled in $51.7 billion, the Web site said.
Miller and other analysts warned, however, there is little value in Fannie and Freddie shares, with their continued existence as going concerns in doubt.
Source: United Press International
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