BUSINESS PLACE RECOVERS
PLACED 6,75 BILLION 12-MONTH BOTS AT 3,67%
The collapse, then the recovery and finally the zeroing of the losses with the positive sign, even if only for a few minutes. It's a very tense morning in Piazza Affari. At the end of the morning, the price list returned to lose ground (-0,64%), but to a lesser extent than the other European stock exchanges: the Dax lost 2,22%, the Cac 2,36% and the Ftse 100 the 1,57%. A timid trend reversal in Milan began in mid-morning after the government's signals in the direction of a quick approval of the maneuver, within the week: "I'm going to Rome to close the state budget," said Minister Giulio Tremonti leaving the Ecofin meeting taking place today.
But the recovery came with the results of the 12-month BOT auction which turned out to be better than expected, albeit with yields rising to the highs of 2008 and declining demand: against supply of 6,75 billion euro, there was demand for over 10 billion (1,55 times supply). Allocated 6,75 billion with a weighted average yield of 3,67%, the highest since September 2008 (2,147% the yield of the previous auction).
All eyes are now on Thursday's BTP auction for a total of 5 billion euros. In the meantime, Italy had also received the support of the new IMF director Cristine Lagarde: “'Italy's problems are dictated by the markets. Some figures from Italy are excellent. The primary deficit is one of the best. The debt is particular in its characteristics because it is held within the country”. It is too early to understand whether the wave of speculation and debt-related sales that has hit Italy has exhausted its strength.
According to some operators, the recovery of the market will be short-lived: the auction of Bots has done less badly than expected and we are seeing a technical rebound due to the sharp declines recorded with the panic selling wave of yesterday and this morning. The start of the session was dramatic: -5% after the first few minutes of trading, falling below 18.000 points and reaching the levels of July 2009. The usual scenario was on display at the beginning: bank stocks down and numerous suspensions.
On the other hand, in the morning the BTP spread over the Bund widened to 347 basis points, for the first time since 1997 the yield breaks through the 6% threshold to 6,02%. Tensions that only partially subsided with the spread closing in on the area of 328 basis points. The Greek debt crisis is today on the Ecofin table. The knot on the modalities of the new aid package has yet to be resolved. Yesterday evening the Eurogroup declared its readiness to expand "the intervention capacity and flexibility of the ESF, lengthen the maturity of loans and reduce interest rates" (essentially a strengthening of the bailout fund) to safeguard stability finance of the euro area.
For Greece, three hypotheses were discussed: the renewal of the Greek debt by public and private investors (as proposed by France, but the solution seems to lose weight; the bond swap, with an extension of the maturity of the securities and the the idea of a debt buyback by Greece with loans from the bailout fund.
But the situation is still uncertain and nervousness reigns supreme in the operating rooms. Thus the wave of sales has also spread to other European markets after starting on Friday especially in Italy and the euro has dropped below 1,39 against the dollar, the minimum in the last four months. Concerns about the Old Continent also affected Asian stock markets and Wall Street which closed down. Now we are looking at the opening of negotiations in the USA, which in recent sessions have unleashed a new wave of sales in Europe, accelerating the fall in the lists in the afternoon.
BANKS IN RECOVERY
WEAK INDUSTRIAL AND ENERGY
Piazza Affari is breathing and banking stocks benefit, with the index rising by about 2%. The biggest increases in the Ftse Mib at the end of the morning in fact concern financials: Ubi Banca rises by 3,45, Unicredit by 2,95%, Intesa Sanpaolo by 2,69% and Banca Mps by 2,56 percent. Azimut puts the turbo on with a 5% leap after the drops in the last few sessions due to the market situation but also to the results of the June collection.
The CEO of Bper Fabrizio Viola confirmed that no capital increase is in sight At the beginning of the session we had again witnessed very strong selling pressure on banks and insurance companies with various downward suspensions: Unicredit (-7,1%), Intesa Sanpaolo (-5,1%), BP Milano (-6,6%), Fondiaria-Sai (-6%), Mediolanum (-5,5%) and Generali (-5,1%). However, the rebound did not help Fondiaria Sai which continues to travel down by 2,76%.
The Consob restriction on short selling has been in force since yesterday, but we will still have to wait to understand if the lists will benefit from it: the idea is that it is not just speculation but also actual sales of funds and investors motivated by fear village. Meanwhile, the date for the release of the stress tests is approaching, Friday 15 July. After the drop at the start of the session (-4,45%), Fiat zeroed its losses (0,06%) but remained weak: according to press sources it would be willing to renew a one billion euro revolving credit line due to expire in February 2012 with one of two billion.
The energy sector is also weak (-1,15%). Based on press rumors, A2A (-0,46%) would be willing to ask for the presidency of Edison (-1,5%) as part of the conditions of the agreements with EdF on the new governance of Foro Buonaparte. Interpump (-0,27%) limits the damages after the news of the acquisition of Galtech operates in the production and marketing of gear pumps and motors, distributors and hydraulic accessories and components in general.
The contract provides for the purchase of 53% of Galtech's share capital for a total price of 3,3 million euro, to be settled half in cash and half with Interpump Group treasury shares and the option for the sellers to sell the further 47 % from the date of approval of the 2014 financial statements until the date of approval of the 2025 accounts.
