CCTV.com - CNTV English - CCTV News

Fannie Mae, Freddie Mac move to OTC market

07-09-2010 13:46 BJT

Watch Video

Play Video

U.S. mortgage-finance giants Fannie Mae and Freddie Mac have delisted their shares from the New York Stock Exchange, and moved to the over-the counter market. Experts say the move shows efforts made by the U.S. government to scramble out from the economic crisis.

Last month, Fannie Mae and Freddie Mac's federal regulator ordered the two companies to delist their shares from the NYSE. The decision was made after the exchange formally notified the government that Fannie Mae no longer met listing standards. Its shares had fallen below the 1 U.S. dollar share-price threshold maintained by NYSE Euronext.

Experts believe the delisting might shed light on the process of their privatization.

Jacob Funk Kirkegaard, Researcher of Peterson Institute for International Economics said "So in economic terms, it doesn't make any particular difference. But I think it will be the first step towards the Obama administration to figuring out what we are going to do to these companies. ...."

The U.S. government took over the companies through a legal process known as conservatorship in September 2008, as rising mortgage defaults threatened to burn through thin capital reserves.

Despite the 145 billion U.S. dollars injected by the government to cure the mortgage giants, their share prices have lingered around the one U.S. dollar mark.

Experts say the problems are deeply rooted in the special responsibilities of the two companies.

Jacob Funk Kirkegaard said "Their roles are really crucial. These are the problems. You can't really seriously restructure and scale down those companies without costing a decline in the housing market...."

Fannie Mae's shares gained 5.7 percent to 26 cents in after-hour trading, while Freddie Mac's dropped 8.8 percent to 31 cents.

But analysts say the real reason of the move lies in the contradiction between government guidance and the benefit of shareholders.

Editor:Xiong Qu |Source: CCTV.com

Hot Videos view more

The celebrations are still continuing as the victorious coach, Joachim Loew, has been honored for his achievement in his hometown of Freiburg.
Germany coach Loew honored in hometown of Freiburg

Chinese men´s national team continued its preparations for next year´s Asian Cup, as they managed a one-all draw against visitors Jordan during a football friendly in Harbin, the capital city of Northeast China´s Heilongjiang Province.
China held to 1-1 draw by Jordan

The defending world champs came into the contest with a perfect 6-and-oh record, but they would be in for a tough first half before opening things up in the second.
USA beat Slovenia 119-76 in quarter-finals

Hot Stories more

UK authorities believe killer of James Foley is a British national

Across the UK the hunt is on for James Foley’s killer, who authorities believe is a British national. As Richard Bestic reports from London, Prime Minister David Cameron cut short his summer break to lead his government’s response.

Israeli war jets renews Gaza strike as truce talks stalled

Three Palestinians were killed and 40 others wounded in the intensive Israeli war jets´ airstrikes on the Gaza city on Tuesday night, shortly before an end of a 24-hour ceasefire in the Gaza Strip,

Missouri police arrest dozens after violent night

As the protests in the town of Ferguson, Missouri turned violent with police facing ´heavy gunfire´ from some ´criminal elements´, cops fired tear gas, stun grenades and arrested 31 demonstrators on Monday night.

Picture in news more

More Video News

Choose TV Program