European stock exchanges recovering after the Wall Street landslide at the end of the week. In Milan, mid-morning the index marked + 0,3%, before falling to a narrow 0,15%, before slipping below parity. The trend of the other Stock Exchanges of the Old Continent is similar. At midday only the English FTSE recorded a modest gain (+0,10%), slightly above parity Paris +0,02% and Frankfurt - 0,22%.
The euro strengthened to 1,435 against the dollar from 1,432 yesterday evening. The division between the ECB and Germany over Greece has the paradoxical effect of pushing the yield of the Bund down to its lowest level in five months. Consequently, the yield on the Spanish government bond improved by 5 bp and the Italian Btp strengthened by one basis point.
REFERENDUM: OK FOR RENEWABLES, ACEA CRYING
The referendum effect is felt in Piazza Affari on the renewable energy sector: Enel Green Power gains 2,7%. Kersekf (+9%) Eems (+5,3%) and Ternienergia (+3,4%) also rose. On the contrary, Hera (-2,58%), Acea (-2,10%) and Iren (-1,84%) lost ground due to the referendum on water. “The regulatory uncertainties – reads a note from Fitch – could be reflected in a suspension of bank loans to the sector, at least until there is greater clarity on alternative remuneration systems. This could cause delays in the execution of investments”.
Strong expectations on the market for the developments of the Bpm match, after the flurry of interviews on the weekend by the president Massimo Ponsellini and the general manager Enzo Chiesa. Before the start of the top management conference call, the stock recorded a rebound of more than 3%, on the wave of rumors confirming the presumed interest of Mediobanca, which in any case will lead the underwriting syndicate for the capital increase (1,2 billion against the current capitalization of around 800 million) scheduled for September. In the interview with "Sole 24 Ore" Chiesa stated that: 1) the Bank of Italy's observations on the loans not classified by Bpm as problematic referred to 30 June 2010 and implied 162 million in additional provisions which are largely already were made during 2010 and in the first quarter of 2011. To date, according to Chiesa, 49 million euros of additional provisions remain to be made;,2) liquidity in one month would be equal to 3 billion euros (equal to 6% of assets) and the three-month one is positive for over 1 billion euro; 3) there is uncertainty about the extension to five proxies as requested by the Bank of Italy as the Amici della BPM association would be against it.
Meanwhile, among bank stocks, Unicredit and Intesa Sanpaolo (+1%) rose, preceded by Banco Popolare (+3,52%).
ELECTROLUX INFLAMES INDESIT (+4%)
The news that Electrolux, number two in the world in household appliances, will raise its price lists from October by between 5 and 7% to balance the increase in raw materials has favored the rise of Indesit (+4%): for the Italian group the indications for the whole of 2011 they expect at most only a slight increase in average sales prices. Our estimates are for an average increase of 1%. But the stock has already lost 12% year-to-date on forecasts of a weaker market and indications of a greater-than-expected negative impact from the increase in raw material costs (100 million compared to an initial estimate of 80 ).
UBS POINTS DELLA VALLE AND BERLUSCONI
Conversely, the rejection of UBS weighs on the fate of two stocks, Tod's and Mediaset. Diego Della Valle's company loses 2,8%. UBS lowered its buy recommendation to neutral. However, the target price rose to 96 euros from 82 euros. Indeed, according to analysts, the stock is one of the best of the year in the luxury industry, but its yield curve is already close to saturation. "We are very confident about the results of the next quarters, but we see a limited upside in the medium/long term", add the UBS experts in today's note.
As regards Mediaset (-0,8% to 3,42 euros), UBS cut its target price from 4,7 euros to 3,5 euros and confirmed its neutral recommendation. The report talks about the political risk and the disappointing trend of advertising sales in the coming months, analysts do not expect that the recovery, if it ever arrives, will not take place before the autumn.
MAIRE TECNIMONT RISES IN INDIA
Maire Tecnimont has announced that its main operating company Tecnimont SpA and its subsidiary have been awarded two turnkey contracts for the construction of polyolefins (polyethylene and polypropylene) plants in Dahej, Gujarat State (India). The two contracts have a total value of approximately USD 440 million and concern the construction of a polypropylene plant with a capacity of 340 thousand tons per year, as well as two polyethylene plants with a capacity of 360 thousand tons each.
The stock, which in the space of a month has lost just under 50 percent, gains 5,5 percent in the middle of the day.
