Jefferies Provides Details on European Sovereign Debt Exposure; Shares Bounce to Finish the Day Higher (JEF)

Shares of Jefferies Group Inc. (NYSE: JEF), the New York City-based securities and investment banking firm, reversed earlier losses to finish higher for the day after the company provided details on its European sovereign debt exposure.

After falling as much as 7% in the morning, Jefferies shares bounced back to finish the day 0.50% higher at $12.07 on above average volume of 39.69 million.

Jefferies disclosed its positions in European sovereign debt to ease worries, which were raised after MF Global Holdings Ltd. filed for bankruptcy on Monday due to its exposure to euro zone debt. Jefferies released data on its positions in sovereign debt of Portugal, Italy, Ireland, Greece and Spain. The data showed that the company has a total net short position of $9 million.

Jefferies had exited all of its positions in debt-laden Greece. The company had also offset its $2.5 billion worth of bond holdings in other troubled euro zone economies by taking a short position worth $2.4 billion.

Jefferies CEO, Richard Handler said that these are fragile times in the financial market and the company decided the only way to conclusively dispel rumors, misinformation and misplaced concerns is with unprecedented transparency about internal information that is rarely, if ever, publicly disclosed.

Speculation about Jefferies’ exposure to euro zone debt began after MF Global filed for bankruptcy on Monday due to its huge exposure to debt from Belgium, Italy, Ireland, Portugal and Spain. However, Jefferies sought to distance itself from MF Global Holdings.

Jefferies efforts were not enough dispel the rumors though and the company’s shares remained under pressure through the week. The company also came under pressure from rating agencies, with Egan Jones downgrading the company due to its reliance on short-term debt.

Finally, Jefferies today decided to take the dramatic step of disclosing its bond holdings in Europe.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.