Reuters: Hot Stocks: Mediaset shares brace for volatility after Berlusconi ruling

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Mediaset shares brace for volatility after Berlusconi ruling Aug 2nd 2013, 06:52 MILAN | Fri Aug 2, 2013 2:52am EDT MILAN Aug 2 (Reuters) - Shares in Italian broadcaster Mediaset are braced for a volatile trading session on Friday after Italy's supreme court upheld a tax fraud conviction against its owner Silvio Berlusconi. The ruling, confirming a sentence for tax fraud involving inflated invoices at Berlusconi's Mediaset broadcasting empire 20 years ago, was the first definitive sentence the former premier and centre-right leader has received. But the impact is still unclear, say investors. "It's a confused and complicated sentence," said Roberto Lotici, fund manager at Ifigest. Another fund manager agreed. "The news in itself is very bad news," said a fund manager in Milan. "But there is still a lot of unknown technicalities to work through before we know if he is out of the picture or not." Shares are likely to fall on the uncertainty, a trader said. "There'll be a lot of speculation today. My feeling is the shares will fall at the start, though some investors will be looking at whether the decision could prompt him to sell the group," a Milan trader said. Thursday's ruling came after the Italian market closed, though shares in the broadcaster fell in after-hours trading. "The truth is this signals another step towards the end of Berlusconi's political life," said Bernstein analyst Claudio Aspesi. "It will be increasingly difficult for him to govern and this in turn basically means the political protection he has been able to give Mediaset in recent years is destined to wane." Shares may be supported by Mediaset's forecast of a small recovery in advertising sales in July, indicating the weak market could pick up. (Reporting by Stephen Jewkes and Danilo Masoni; Editing by David Holmes) Link this Share this Digg this Email Reprints

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