Wall Street has again focused on the prospects for General Electric's financial services businesses, putting the US group's shares under pressure.
Shares in the the industrial and financial group, which employs 2,000 people in the Republic, fell more than 4 per cent on Friday, the second-worst performance of any of the 30 blue-chip companies that make up the Dow Jones Industrial Average after JP Morgan Securities published a critical report about GE Capital.
The report came a day after Grant's Interest Rate Observer, a widely read financial newsletter, cast doubt on the asset quality of GE Capital.
JP Morgan's analysts calculated that leverage at the non-insurance financial businesses was higher than previously assumed and said GE Capital might require an infusion of $5 billion (€4.93 billion) from GE itself to ensure that the group kept its Triple A credit rating.
With less cash on hand, GE might have to pay for more deals with stock, JP Morgan said.
GE played down the significance of the JP Morgan and Grant's reports, saying that, at parent company level, debt represented only 6 per cent of total capital.
"At that level, GE, the parent company, can provide tremendous support to GE Capital, as well as \ the capacity to fund acquisitions and grow the industrial businesses," said a GE spokesman.
The company is likely to address some of the leverage concerns at an investor meeting on November 21. - (Financial Times Service)
