Morgan Stanley Anticipates Rise In BPOP Share Prices

Morgan Stanley has issued a report anticipating rising share prices for Popular, Inc. BPOP. According to Morgan Stanley, "BPOP has sold off sharply since its peak in early Feb, down 17% versus a 2% decline in the group and a 1% gain in the S&P 500. From our conversations with investors, it appears the main driver of the sell off is concern that Popular's deal to sell $500 mil of non-performing Puerto Rican construction loans has fallen through. Management dismissed these concerns and fully expects the deal to close in April (it reports 1Q11 earnings on Apr 20). Even if the deal has fallen through, which we doubt, BPOP has already marked the loans to market, suggesting incremental losses will be minimal." BPOP is rated Overweight and closed on Friday at $2.94 a share.