Flat stock market indices in Europe today waiting for the Fed: the market now takes for granted another cut in interest rates. mbehind the apparent calm there is great excitement, especially in the auto sector, after the confirmation of the negotiations between Fiat Chrysler +9% and Peugeot +6% in view of a merger between the two groups. Loses hits Renault-5%, already betrothed to the Italian-American group.
In Milan the index is practically unchanged, Paris gains 0,28% thanks also to the rally of L'Oreal +7%. Which yesterday presented very good results for the quarter. In red Frankfurt -0,10%, heavy loss of Madrid -1,40%, weighted by the banks. Outside the Eurozone, London moved slightly -0.03% and Zurich -0,01%. Credit Suisse more than doubled net income in the third quarter from a year earlier to 881 million Swiss francs ($886,94 million), thanks to higher revenues in its flagship wealth management division and trading .
However, the attention of the markets is concentrated on the possible merger between the two car groups, worth more than 50 billion euros with a combined sales value of 8,7 million vehicles in fourth place after Volkswagen, Toyota and Renault/Nissan, all with more than 10 million vehicles. While awaiting details on the merger, the market, as Morningstar analyst Richard Hilgert says, deems "the combination of these two companies reasonable given the global competition, the high capital intensity and the sector's difficulties deriving from the electrification of motors and the autonomous driving technology. The French government, a 12% shareholder, has announced that follows the situation to protect its interests and will urge the new group to engage in the pan-European battery consortium. “We are observing what happens. It's a market operation, I think it's correct not to make statements at this time”, said Minister Stefano Patuanelli.
Leading the post merger subject should be the current CEO of PSA, Carlos Tavares, capable of bringing Opel back into profit after years of losses. President will be John Elkan. Exor +2,92%, is the leading shareholder of FCA with 29% and this share is worth 26% of the NAV.
Instead Pirelli loses hits -7,13%%. The company has closed the third quarter 2019 with €1,38 billion in revenues, up 6,7% year on year, +4% on a comparable basis. Ebit margin at 17,7%, down 160 basis points year over year. Sales are slightly better than expected, profitability disappoints. The tire manufacturer has revised its forecasts for 2019 downwards and postponed the presentation of its business plan to 2022.
The banking sector is also weak. The EuroStoxx index loses 2% under pressure from Deutsche Bank – 5,5% after disappointing data for the quarter are. The results for the quarter have also been released by the Spanish Santander, in Madrid the share is down by 3%. In Milan, Unicredit -1,8%, Intesa Sanpaolo -1%.
The BTP moved little to 0,99% yield, after the auction of 6,5 billion euros of 5-year and 10-year bonds. The Treasury has placed 6,5 billion euros of securities, in line with the objectives of the operation. For the third tranche of the 5-year BTP February 2025 coupon 0,35%, the yield rose to 0,42%, the highest since the end of July. The fifth tranche of the April 2030 1,35% BTP, placed for 3 billion, saw the yield rise to 1,06% from the 0,88% of the placement at the end of September.
Cerved's leap +4% should be noted, which closed the third quarter with a good result, both in terms of revenues (115 million euros) and Ebitda (49,8 million euros). Net debt down more than expected, to 561 million euros, thanks to good cash generation.
