Markets, Business & Tech Briefing: PSI Falls 0.6%, Mota-Engil Posts a Record Half, Novobanco Sells the Vieira Debt

The Run Ends, and One Stock Does All the Work

The PSI (Portuguese Stock Index) closed Thursday, 27 August, at 9,389.24 points, down 0.60%. That ends the five-session winning run we described yesterday as technically alive and practically over, and it ends it the way these things usually end: not on any Portuguese news, but on a European session that turned against every market except Frankfurt.

Eight of the sixteen members rose and eight fell, which on paper is a neutral session. It was not, because the weight sat entirely on one side. Galp Energia led the falls at minus 2.08% to €20.71, a third consecutive decline for the oil company and the largest single drag on the index. REN, or Redes Energéticas Nacionais (National Energy Networks), fell 1.54% to €3.510. Jerónimo Martins lost 0.88% to €18.00, Sonae 0.74% to €2.01, EDP 0.68% to €4.666 and EDP Renováveis (EDP Renewables) 0.58% to €13.73. Every one of the five largest companies on the Lisbon board finished lower, and when that happens the arithmetic does not care how many small caps closed green.

BCP, or Banco Comercial Português, slipped 0.45% to €1.1070, easing back from the eleven-year high it touched on Wednesday. It did so on a day when Bestinver Securities raised its price target on the stock from €0.90 to €1.10 while leaving the recommendation at hold, which is a fair summary of where the sell side now sits: the analyst consensus target compiled by Bloomberg is €1.13 a share, and BCP is trading within two cents of it. The bank has run a long way this year and the research is catching up rather than leading.

Against all of that stood Mota-Engil, up 3.88% to €4.82 and at a one-month high, on first-half accounts that were the best in the group's history. CTT added 0.46% to €6.585 and Teixeira Duarte 0.42%. That was the entirety of the good news, and it was not enough.

Europe explains the rest. The DAX was the only major index to rise, gaining 0.31% to 26,367.2 points. The Stoxx 600 fell 0.72%, the Euro Stoxx 50 lost 0.71% to 6,424.7, the FTSE 100 dropped 0.79% to 10,792.5, the FTSE MIB fell 1.17% to 52,265.12, the Spanish IBEX ceded 0.93% to 19,881.6 and the CAC 40 was worst of all at minus 1.68% to 8,319.9. Banking was the weakest sector on the continent and French banks the weakest part of it, on renewed nerves about political instability in Paris. The single largest casualty was Pernod Ricard, down 7.4% after cutting its growth guidance on weak demand in the United States and China; annual sales fell 3.9% and the drinks group is accelerating a €1 billion cost-reduction programme.

Two things pushed against the tide and failed. Technology held up well in Europe on the back of results and projections from Nvidia and Salesforce, which sent Nvidia up around 6% on Wall Street; Lisbon has almost no technology weighting, so none of that reached the PSI. And Brent, the European crude benchmark, reversed three sessions of falls to close at $88.46 a barrel on the ICE exchange in London. Galp fell anyway, which tells you the selling was positional rather than a read on the oil price.

Mota-Engil's Best First Half Ever, and a Promise to Fight the Rail Verdict

The Porto builder reported net profit of €74 million for the first half of 2026, up 24% from the €59 million it earned in the same period of 2025 and roughly two and a half times what it was making three years ago. Turnover reached €2.9 billion and EBITDA, or earnings before interest, tax, depreciation and amortisation, came in at €487 million. All three are the best first-half figures the group has ever published. The order book stands at a record €17.7 billion.

We flagged yesterday that these numbers were due, and that they would land into an unusually loud news day. They did. On Wednesday the group signed a thirty-year concession over roughly a thousand kilometres of the Democratic Republic of Congo's stretch of the Lobito Corridor, and half an hour after the Lisbon close the jury assessing the Oiã to Soure section of the Lisbon to Porto high-speed line recommended awarding the contract to the consortium of Sacyr, DST 2gether and Alberto Couto Alves, and excluding outright the Lusolav III grouping that Mota-Engil leads. The order book announced today does not yet contain either outcome.

Chief executive Carlos Mota dos Santos gave Jornal de Negócios the group's answer to the second one. Lusolav, which Mota-Engil forms with six other Portuguese builders, will contest the jury's preliminary report. His objection is not merely that his own consortium was excluded; it is that the jury proposes awarding a €2 billion contract to a proposal whose technical evaluation, in his account, "is not even positive". That reframes the fight. Lusolav has spent six weeks arguing that its rival breached the tender's own cost ceiling around Coimbra, an argument that gained weight on 14 August when the frontrunner conceded it had left out the four-track section the specification required; the new line of attack goes at the scoring itself.

There is an oddity worth recording on the other side. Three weeks ago, when confronted with the list of exclusion grounds its rival had assembled, the Sacyr grouping declined to identify any exclusion grounds in Lusolav's proposal and said it would be willing not to contest the outcome if it lost. Its position now, having won the recommendation, is that it never sought the exclusion at all: "We wished it were not excluded. We only wanted to win." Whatever the merits, the prior-hearing window is open and neither party is walking away. The price gap that started all of this, €2,038 million against €2.3 billion on the construction component, was the subject of our mid-July briefing, and it has not moved.

Investors took the results and ignored the litigation risk, which is the rational trade when a company has just posted record numbers and carved its African mining arm into a standalone vehicle ten days ago to make room for outside capital. Mota-Engil's problem, to the extent it has one, is that its growth is increasingly happening several thousand kilometres from Lisbon while its domestic pipeline runs through a tender process nobody can now predict.

Novobanco Puts the Entire Luís Filipe Vieira Estate on the Market

Novobanco has put up for sale every loan, property and property company connected to Luís Filipe Vieira, the former Benfica president whose economic group left the bank with more than €400 million of unpaid debt. ECO reports that KPMG is running the process, that investors are submitting non-binding offers now, that binding proposals are due around October and that the bank wants the whole thing closed before the end of the year.

The scale of what is being sold is easier to grasp piece by piece. The largest items are the bank's 66.3% of Promovalor and 63% of Inland, two Vieira property companies carrying €350 million of debt that fell into Novobanco's hands in February, when the Supremo Tribunal de Justiça (Supreme Court of Justice) confirmed the legality of converting €160 million of mandatorily convertible securities that BES had subscribed back in 2011. The bank booked both stakes at zero euros. What KPMG is actually marketing alongside them is a set of contractual rights worth €352 million arising from the exercise of a put option against the group's ultimate beneficial owners, which the teaser describes as potentially opening access to those owners' own asset base.

Then come the tangible pieces. Three further portfolios contain loans collateralised by land in Loures, Vila Franca de Xira and Tavira, valued at €56 million but carrying no valid planning permission, since the previous licences have expired or preliminary information requests have yet to be filed; that land secures roughly €65 million of debt. There is a seventeen-floor office building in Maputo, valued at about €20 million against €25 million of debt, running at 35% occupancy and generating around €900,000 a year in rent. And there are the units of a special alternative investment fund created ten years ago out of a €230 million debt restructuring and managed by C2 Capital, of which Novobanco subscribed €140 million and now holds almost 96%, having executed the Vieira family's 3.8% in 2022.

Two things make this more than a workout story. The first is that the losses are already gone: they were written off years ago and covered by the Fundo de Resolução (Resolution Fund) under the contingent capital mechanism dating from the Lone Star era, so whatever is recovered lands as upside rather than relief. The second is who is selling. This is the first large legacy disposal since France's BPCE took full ownership of the bank on 30 April, and it reads as a new owner clearing the balance sheet of a problem the previous ones tried to manage rather than end. Vieira himself, who was acquitted in the saco azul tax fraud case in April, told a parliamentary inquiry five years ago that he had "several businesses" not pledged to the bank. The recovery rate will tell us whether that was true.

MEO's Revenue Has Stopped Growing and Its Operating Profit Is Falling

Altice Portugal published MEO's first-half accounts on Thursday and they describe a business that is holding its customers and losing its economics. Excluding the sale of Intelcia, total revenue rose 0.2% in the half to €1,297 million while EBITDA fell 7.5% to €443 million. The second quarter alone shows the same shape: revenue up 0.3% to €648 million, EBITDA down 7.5% to €222 million. Capital expenditure in the quarter was €97 million, a million less than a year earlier, and €202 million across the half.

Chief executive Ana Figueiredo calls this resilience in "one of the most challenging periods the telecommunications sector has been through", and the operational numbers do support the first half of that claim. MEO ended June with 4.5 million fixed customers, up 0.3%, and a postpaid mobile base up 3.7%. Consumer revenue was €366 million, up 0.3%. Business services brought in €282 million in the quarter, which the company says grew 1.6% once you strip out Altice Labs and the deliberate wind-down of network wholesale to other operators. Altice Labs itself, the Aveiro research and development arm that has been under pressure for years, doubled its revenue from outside Portugal, lifting the export share of its total from 10% to 20%.

The growth is coming from somewhere else entirely. MEO Energia, the electricity retail business the operator launched to diversify away from telecoms pricing, grew revenue 36% in the quarter and now has 256,000 customers. A telecoms incumbent selling electricity to defend average revenue per user is an unusual answer to competitive pressure, and so far it is the only one working.

The cost side is the restructuring. Between January 2025 and the end of 2026 around 1,200 people will have left the company through mutual agreements, retirements and early retirements. That is the plan for which the government granted MEO empresa em reestruturação (company under restructuring) status, and for which, as we reported on 12 August, the state signed off on 300 of the 500 subsidised exits the operator had asked for. Figueiredo says the benefits will become "increasingly visible in the coming quarters and through 2027", which is a long way of saying not yet.

She also used the results to lobby. The sector, she says, is at a decisive moment, with Anacom consulting on renewing the main operators' spectrum licences for shorter periods than the industry wants. Her argument is that investment requires predictability and that the robustness of digital infrastructure bears on Portugal's economic competitiveness and digital sovereignty. It is a reasonable argument. It is also the argument of a company whose EBITDA just fell 7.5% and which would prefer a longer amortisation runway.

Martifer's Glasgow Bill Arrives, and Three Other Sets of Numbers

Martifer swung to a net loss of €7.9 million in the first half against a profit of €8.0 million a year earlier, and the cause is almost entirely one line. The group booked €11 million of provisions, of which €10.4 million is a one-off relating to the Glasgow Arena following the settlement Martifer UK reached in an Edinburgh court, with a further €0.6 million topping up the provision on the Arena da Amazónia for currency and interest. We covered that settlement on 1 August, when the group paid £9 million to close a fifteen-year-old dispute; this is the accounting arriving three weeks after the cheque.

Underneath it, the picture is mixed rather than bad. Operating income rose 3% to €145.7 million and metallic construction revenue grew 10% to €81.1 million on work in the United Kingdom and Portugal, but EBITDA fell 38% from €16.3 million to €10 million and the margin compressed from 12% to 7.1%. Metallic construction went from a €1.3 million profit to a €13.2 million loss on the Glasgow charge. Naval, which remains the group's reliable earner, saw net profit fall 19% to €4.4 million on revenue of €59.8 million. The combined order book across both divisions is €579 million, and that number is about to get larger: Martifer took 3,924 tonnes of steelwork on the Lisbon airport expansion this week. Net debt rose from €47.3 million to €58.3 million on a capital expenditure programme dominated by the new dry dock at Viana do Castelo, and equity remains positive at €61.5 million.

Three shorter items. Fosun International reported first-half profit of 1.72 billion renminbi, about €220 million and up 160% year on year, with Fidelidade contributing €165 million on profit growth of 24%. That matters in Lisbon for two reasons: Fosun controls Fidelidade, which has been lining up a share sale to force an entry into the PSI, and it is BCP's largest shareholder, where the bank has signalled that institutional buyers are waiting should the Chinese group sell. A stronger Fosun is a less forced seller.

Fitch revised the outlook on Banco Montepio's long-term issuer default rating from stable to positive and affirmed all its ratings, citing a structural improvement in asset quality, adequate capitalisation, a granular deposit base and an improved assessment of the Portuguese operating environment. That is the first unambiguously good news out of the Montepio group since the European Central Bank pulled Banco Empresas Montepio's licence on 18 August, and it concerns a different entity.

And Greenvolt, no longer listed in Lisbon but still a Portuguese renewables developer of consequence, closed a €218 million package with UniCredit for two battery storage projects in Poland: €153 million of bridge facilities and a €65 million guarantee line, covering the Ełk and Turośń schemes, 400 MW of combined power and 1.6 GWh of storage. Turośń Kościelna was inaugurated in July and Ełk is due to enter commercial operation in the fourth quarter.

Bonds, the Euro, and an ECB Account That Reads Hawkish

Portuguese debt sold off modestly along with the rest of the curve. The ten-year yield rose about two basis points to 3.609%, and the two-year rose nearly three to 2.86%. The German ten-year Bund also rose, to 3.2526%, which leaves the spread at roughly 36 basis points, a hair wider than Wednesday and still close to the tightest it has ever been. Nothing here is about Portugal.

What it is about arrived at mid-morning. The European Central Bank published the account of its July meeting, and it is more hawkish than the decision was. Some members of the Governing Council, the account records, would not have opposed a rate increase in July, on the view that the data received since the June meeting pointed to a need for further tightening. Their reasoning is worth quoting in substance: a late monetary policy response could delay inflation's return to the 2% target, affect inflation expectations more durably and require a larger adjustment later, harming households and firms alike. They see clear upside risks to inflation even though second-round effects have not yet appeared, and argue that policy should move before those effects emerge "so as not to risk falling behind".

The July meeting itself left rates unchanged, with the deposit facility at 2.25%, the main refinancing operations rate at 2.40% and the marginal lending facility at 2.65%. But the account landed in the same week that Isabel Schnabel, a member of the Executive Board, told the press that rates have to rise further, that with inflation where it is a return to target in the medium term is unlikely and that high energy costs could keep inflation above 2% for a prolonged period. Add a remark from Governing Council member Dimitar Radev on Thursday morning that the October and December meetings remain open for further adjustment, and the European rates market spent the day repricing toward tightening rather than away from it. That, and not Lisbon, is why the CAC fell 1.68% and why European banks were the worst sector on the continent. The next Governing Council meeting is on 10 September.

The euro softened. The European Central Bank's reference rate fixed at $1.1645, down from $1.1669 on Wednesday, a move of about a quarter of a cent and the largest daily change in over a week. A hawkish central bank account would normally support the currency; the fact that it did not suggests the dollar was being bought for other reasons, most plausibly the same Ukraine escalation nerves that were weighing on European equities all afternoon.

Tomorrow

Friday is the last trading day of August, which means the tape will be as much about month-end positioning as about anything anyone announces. The domestic calendar is empty. Mota-Engil is again the name to watch, for a fourth consecutive session: the question is whether a 3.88% jump on record results holds when the results are a day old and the rail contest is the only live story left. Beyond that Lisbon takes its cue from crude, which has just broken a three-day losing streak, and from whether European rates markets keep pushing the September ECB meeting toward a rise. Our expectation is a quiet, slightly negative session with the index drifting back toward 9,350, and the five largest names on the board mattering more than the other eleven put together, as they did today.