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French bank Natixis' shares recover yet concerns linger over H20

PARIS, June 21 (Reuters) - Shares in French bank Natixis recovered slightly on Friday from heavy losses in the previous session, but analysts said concerns over its H20 fund management arm remained.

Fund ratings firm Morningstar put the unit under review over its holdings on Thursday, causing a fall in Natixis shares of 11.8%, but they rose 2.6% in early trading on Friday.

"Adverse news around high-margin H20 affiliate could prompt outflows and possible forced sales of illiquid positions," wrote HSBC, as it downgraded Natixis to "hold" from "buy." (Reporting by Sudip Kar-Gupta, Thyagaraju Adinarayan, Simon Jessop and Josephine Mason; Editing by Alexander Smith)