Italy in the trenches after the "slap" by Standard & Poor's, as Welfare Minister Elsa Fornero defined our country's latest downgrade by the rating agency. This morning the market reacted to the blow without identifying a precise reaction: after an opening in the red, the Ftse Mib turned positive, arriving at around 10 and gaining 30%. However, volatility remains high. The same trend for the spread, which after soaring up to 0,4 has returned below 509 basis points.
Saturday there was an extraordinary summit between Prime Minister Mario Monti, the governor of the Bank of Italy Ignazio Visco and the minister Corrado Passera. It is easy to predict that the European Central Bank will also take the field today, which in recent weeks has reduced its purchases on the secondary market. On the contrary, a steel safety net is needed in the short term so as not to frustrate the sacrifices that Italy has made in order to defend the euro.
Super work in sight also for the Consob inspectors, intent on enforcing the divito on short selling and other measures against speculation fueled by high frequency traders.
But it is not legitimate to have too many hopes: today the impact of the downgrading imposed by the agency on Italy will be seen on the telematic price lists together with eight other countries, including France. On Friday, the stock market and government bonds only partially suffered the effect of the downgrade. But there is no need to harbor too many illusions about the start of the week. The yield of the 6,59-year BTP, which was in sharp decline on Friday morning, returned to an increase in the final stages before the weekend, as S&P's intervention was confirmed, ending the day at 8% , XNUMX basis points higher than the day before.
The cut in Italy's rating "is the number one problem": the words of Ewald Nowotny, Austrian central banker and member of the European Central Bank fully address the situation that has arisen after the flurry of downgrades issued by S&P on Friday evening. “In normal times everything is possible – he continued – he too faces very high refinancing needs, such as those awaiting Italy and its banks. But in such difficult and nervous situations it can be a problem”. In other words, when Nicolas Sarkozy and Angela Merkel visit Rome next Friday, it is by no means excluded that Mario Monti will hear repeated "advice" to apply to the Monetary Fund for a loan. A pressing that will be repeated several times, easy forecast, from here to the G20 to be held in Mexico at the beginning of February. Unless the dam of Bots and BTPs, after the positive tests of the past week, fails to get the better of Standard & Poor's.
Moritz Kramer, head of Standard & Poor's for the rating of sovereign debt, partially shares the Austrian banker's diagnosis. The closest mine that could detonate the European powder magazine is the default of Greece: creditors, he said during Saturday's press conference, will get between 30 and 50 percent of the credit. But this "discount" could provoke a reaction destined to hit Italy, which by March must issue approximately 130 billion euro.
The positive note, however, comes from Germany. After the rating agency's challenge, Angela Merkel is not taking steps back. Far from it. During an interview with Deutschlandfunk radio, the chancellor said she was certain that the reforms adopted by Italy and Spain "will convince the markets in the medium term". In the meantime, you are fully ahead of the goal of the fiscal pact by January.
The week promises plenty of topics of interest, even regardless of the financial storms.
First of all, the Unipol-Fonsai agreement faces examination by the authorities. The most delicate point concerns the exemption from the tender offer for the Fonsai increase destined to be postponed from the date initially envisaged (by March). Having announced the public offer on Premafin, Unipol made the continuation of the negotiations conditional on the exemption from the takeover bid obligation on Fonsai, as envisaged in the context of a recapitalization requested by an authority (Isvap in this case). But the exemption, not provided for Premafin, is anything but obvious.
In the spotlight, once again, the performance of bank stocks. The discussion of Unicredit rights ends this week (subscription can take place until January 27). But, above all, on Friday 20 the top management of Banco Popolare, Mps and Ubi will parade in the Bank of Italy who will have to present the plans to strengthen the capital up to a core tier 1 of 9%, as envisaged by the EBA. It will be the fiery debut of Fabrizio Viola of Mps, who ensures that there will be no capital increase.
The turbulence in the financial sector has profoundly changed the balance of Piazza Affari, already considered a "banking list". The reality is now different. The energy-utility sector is firmly in the lead, accounting for 35% of total capitalization. In particular, Eni is worth about 15% of the Italian list. Banks and insurance companies fall back to a more modest 29%, five points less than in November. The industrial sector is stationary at 18,6%, followed by the TLCs with 5,74%.
Black prospects on the Stock Exchange for Juventus already in the black jersey (-44%) in the past week. But this time the disappointing draw with Cagliari has nothing to do with it. In fact, Wednesday 18th is the deadline to exercise the rights deriving from the capital increase already subscribed pro-rata by Exor (72 million against 60%) which has thus ensured the requirement of business continuity. The Agnelli finance company itself said it was ready to take over the 7,5% held by the Libyan Lafico. 32,5% remains in the hands of 35 minority shareholders. It is not certain that the majority of them subscribe to the new titles. In the event, Exor is ready to raise cash, as evidenced by the fact that a guarantee consortium has not been envisaged. If the holding company has to take over more than 90% of the capital, the residual tender offer and subsequent delisting will be triggered. As Andrea Agnelli probably doesn't mind.
The US quarterly season is in full swing. We start today with Citigroup and Wells Fargo. Thursday will be the turn of Morgan Stanley and a trio of technology giants: Microsoft, Google and Intel.
