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Fannie, Freddie See Pressure After Week of Gains (FNM, FRE)
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Shares of GSEs Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) are seeing pressure this morning, following six straight up days for Fannie and four for Freddie. Reports that Bank of China Ltd cut its holding of Fannie and Freddie debt by 29% in the past two months could be contributing to today's weakness.
Bank of China reported that it lowered its Fannie/Freddie portfolio by about $3.14 billion to $7.5 billion as of August 25th.
The news comes as speculation continues about the fate of the GSEs in light of the recently approved back-up plan by the U.S. Treasury. Some feel that if the Treasury has to step in to provide the GSEs with much-needed capital the common shareholders could be wiped out.
Fannie Mae is down nearly 11% currently to $7.09 and Freddie Mac is down over 12% to $4.62. Both have doubled off recent lows, but are still down about 90% over the past year.
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