Climate of expectation on the markets in view of the Monetary Fund meeting. The run of the yen against the dollar stops for one day and the Tokyo Stock Exchange breathes: +1,2% after eight sessions of decline. Weak Hong Kong (-0,2%) and the Chinese markets. Little move Wall Street: the Dow Jones index lost 0,12%, S&P 500 -0,27%, Nasdaq -0,36%.
In the meantime, the US quarterly season has begun, opened as always by Alcoa's accounts (-2,2%). The aluminum giant has confirmed itself as a faithful mirror of the manufacturing economy: profits are holding up, but revenues are down due to lower aluminum prices. And for the rest of 2016 the forecast is negative: the market is slowing down, profits are holding back and the multinational will cut 1.100 jobs. Today the focus shifts to the accounts of Morgan Stanley, the first of the big names in finance to face the arena after a difficult quarter.
OIL RAISES ITS HEAD: SAIPEM +5,5%
The positive note comes from oil, pending the producers' summit in Doha: WTI closed above 40 dollars, Brent is above 43 dollars (+2,2%) for the first time since December. The Russian energy minister, Alexander Novak, said that oil production in Russia will remain unchanged in 2017. In Milan, great leap by Saipem (+5,5%), which should form a new Memorandum of understanding for future works this week in Iran.
MILAN +1,2%. TODAY THE BOT AUCTION FOR 12 MONTHS
For once, thanks to the rally of the banks, it was Piazza Affari that charted the upward course of the European stock exchanges. The Ftse Mib index gained 1,2%. The Paris Stock Exchange rose by 0,2%, Frankfurt +0,6%.
Mid-month Treasury auctions kick off today. This morning 6 billion annual BOTs will be offered (against 6,5 billion maturing) while tomorrow it will be the turn of the medium-long term placement: 6,750-8,250 billion in 3,7, 15 and 30-year BTPs including the new three-year bond years (April 2019, coupon 0,10%).
ATLANTE, THE ANTI-SUFFERING FUND, IS BORN
Dominating yesterday's session was the expectation of the summit at Palazzo Chigi to define the launch of the fund to guarantee the subscription of future capital increases and buy part of the non-performing loans of Italian banks. In the evening, the first details of the “Atlante” operation arrived, the name of the fund that will be managed by Quaestio, an already existing asset management company owned by the Cariplo foundation. The endowment of the fund will be 5 billion, of which 3 will come from the banks, while the Foundations will participate for 500 million. A tranche of between 400 and 300 million should be the prerogative of Cassa depositi e prestiti, while the remainder should be reserved for insurance companies.
The plan developed by Palazzo Chigi also includes a decree to reduce the recovery time for non-performing loans. “The amount of non-performing loans that can be deconsolidated – reads a note from Quaestio Sgr – will be far greater than those acquired by the Fund, as Atlante will concentrate its investments on the junior tranche of securitization vehicles, being able to leverage those with greater seniority for which there is a manifest interest on the part of investors”.
The request for prior authorization from the EU is not envisaged, given that the initiative is the result of largely private capital, but the Commission "will carefully examine the details of the mechanism" to see if there could be any violation of the state aid legislation.
BANCO POPOLARE AND MONTE PASCHI FLYWHEEL
Pending the outcome of the summit, all credit sector stocks closed higher yesterday. At the top of the ranking is Banco Popolare (+10%), one of the stocks most sacrificed in recent weeks (-63% since the beginning of the year). According to rumors, UnipolSai would be interested in participating in the one billion euro capital increase that the Verona-based banking group is preparing to launch: the two companies operate in this area with Popolare Vita, a joint venture controlled with 50% of the capital , plus one share, by the insurance group. Banca Popolare di Milano (+5,9%) also bought well, the next partner of Banco Popolare and Bper (+5,9%): also for the Modena institute there is talk of a possible axis with Unipol, already an ally in Arca Life.
Followed by Monte Paschi +9,7% (-57% since the beginning of the year), awaiting news that could arrive at next Thursday's shareholders' meeting. Unicredit and Intesa also performed well (+1,7%), both destined to play the main role in the next increases of Veneto Banca and Banca Popolare di Vicenza.
Among the insurance companies, Generali rose by 1,2%. The Board has launched a bond issue program for 15 billion to replace the previous one (12 billion). Francesco Gaetano Caltagirone further rounded up his stake, rising to 3% of the insurance company. UnipolSai -0,5%, Cattolica +4,1%, Poste Italiane +0,9%.
CAIRO PUSHES RCS TO THE STARS. MEDIA IN FERMENT
The offer of Cairo Communications (+2%) for Rcs Mediagroup is in the spotlight. The share of the Corriere della Sera publisher took off, earning up to 31% and then closing at +28,79% at 0,59 euros, above the valuation made by the president of Torino Calcio. Among the current shareholders, the critical opinion of Mediobanca stands out, which maintains the target price of 0,96 euro and has issued a neutral opinion.
On the contrary, Equita, which assists the Ops in Cairo, has recommended buying the shares, revising the judgment to 'buy' precisely in the light of the operation. 'We judge the Cairo ops positively for its ability to manage turnarounds – he commented – we expect 32/35 million euros of greater efficiencies and slightly growing revenues”. The operation was also promoted by Banca Akros. Cairo's offer "isn't spectacular" given the premium of around 27%, "but in any case it offers RCS shareholders the opportunity to benefit from the creation of value to come". For this reason, Banca Akros recommends a 'accumulate' on shares with a price target of 0,85 euro.
Urbano Cairo said: "This is a market operation: I don't want to make a takeover bid to delist RCS if it goes through, I want to keep RCS's old shareholders in so that they can benefit from any increases together with me and my shareholders and positive activities that we will do trying to restructure Rizzoli”. And speaking of the price he added: “We have valued Rcs 285 million, if we add the debt of 487 million we arrive at a value of 770 million; by subtracting the 90 million that RCS will collect from the sale of the Books, we arrive at almost 700 million in valuation. Let's take into account that a company like the Espresso group today capitalizes around 370 million and is a group that has an important newspaper like Repubblica as well as all the local newspapers and has no debts”.
Mondadori (+5,64%) and Class (+9,04%) are also in fibrillation among the editorials. There was also a good market response to the operation between Mediaset (+2,5%) and Vivendi, already abundantly discounted before last Friday's official announcement. HSBC promoted the share to Buy from Hold, raising the target price to 4,20 euros from 3,90 euros, after the details of the expected agreement.
Meanwhile, Vincent Bolloré continues shopping. Yesterday Vivendi announced the purchase of 15% of the French chain Fnac. Indeed, the group chaired by Vincent Bolloré has undertaken to subscribe to a reserved capital increase for 159 million euros at a price of 54 euros per share.
BROADBAND MAKES PRYSMIAN FLY
All industrial shares rose: Finmeccanica +0,5%, StM +1,4%, Fiat Chrysler +2,4%. Prysmian closed up 6% on the price levels at the beginning of the year at 20,15 euros. Equita's analysts raised the target price on the stock to 23,40 euros from the previous 21,80 euros, promoting the judgment to Buy from Hold. It is the highest target ever set by Milanese analysts since they started covering it back in 2008. The decision is linked to more positive expectations on the TLC cable business thanks to the announcement of some maxi-projects in the optical fibre.
In the Luxury segment, Tod's (+3,4%) and Yoox (+2,1%) rose.
