We need to go back to 1998 at the time of the negotiations with GM to find the Fiat share on these price levels. For heaven's sake, any comparison is simply unthinkable if one thinks of the transformations undergone by the old Lingotto at the time of Cesare Romiti's exit to the current Italian-American group. But the euphoria with which the markets welcomed the news from Automotive News on the interest of the Chinese Great Wall demonstrates that today as then there is the perception that the company is on the verge of big news. It is difficult to explain otherwise both yesterday's rise (+6,92% to 11,44 euros) and the rally of recent months: in the last year the value of FCA has almost doubled.
For now, there is certainly only the will of the "Great Wall" company to become the world's largest SUV manufacturer" as confirmed yesterday by the group spokesman, explaining that "acquiring Jeep, a global SUV brand, would allow us to reach our goal sooner and better". The terms of the offer, which FCA says it has not yet received, remain vague but the interest is clear: "We have always had Jeep in our sights - the Chinese spokesman told the Financial Times". In short, the intention is there. It remains to verify the financial transferability of the group, much smaller than FCA (2016 turnover of 14,76 billion dollars against 131 of Fiat Chrysler), the willingness of the seller (Fiat Chrysler reiterated yesterday that it "is committed to pursuing its 2014-2018 plan″) and, last but not least, the attitude of the Trump administration in the face of the sale to a Chinese group of a brand-symbol of the US car.
MORGAN STANLEY: THE STEW IS WORTH 14 EUROS, JEEP 15
However, Great Wall's outing had the effect of reviving the market's interest in a possible Fiat Chrysler "stew" as outlined at the end of July by a report by Adam Jonas of Morgan Stanley entitled "Lessons from Ferrari" in which FCA's target price, calculated as the sum of the parts, was raised to 14 euros, while the value of the Jeep alone was valued at almost 15 euros per share. The possibility of a split is not only theoretical: Sergio Marchionne himself, on April 26, during the presentation of the results, answered with a resounding yes to the question of whether the Jeep and Ram brands were big enough to walk alone. And the same goes for Maserati and Alfa Romeo-Maserati. The rise in recent days, triggered by Chinese interest, therefore confirms the market's appreciation for the stew recipe (Jeep but not only) a specialty of chef Sergio Marchionne.
TRUMP RUNS BACK IN AFGHANISTAN, RAW MATERIALS RISE
Markets sluggish yesterday awaiting indications that should come from the Jackson Hole symposium. Operators are trying to understand the orientations of the White House after the exit of the "hawk" Stephen Bannon. Meanwhile, President Donald Trump has announced a change of direction in US policy in Afghanistan: the military commitment has been confirmed, indeed "the men and means that the Pentagon deems necessary will be used".
Positive Asian stock exchanges driven by the increase in raw material prices. Chinese demand has pushed zinc to the highest levels since 2007, record prices also for copper and nickel. The Asia Pacific index rises by 0,7%, Seoul also recovers +0,4% despite concerns about Pyongyang's possible reactions to the US military maneuvers together with those of South Korea. Shanghai rises by 0,2%. Tokyo +0,1%. The Hong Kong Stock Exchange shines with a gain of 1%, supported by positive expectations on corporate profits.
FOOT LOCKER SINKS, OIL DOWN
Wall Street moved little after the losses of Friday's session. The drop in energy (-0,6%) nullified the possible rebound: Dow Jones +0,13%, S&P 500 +0,12%. The Nasdaq dropped 0,05%. The dollar traded this morning at 1,1807 against the euro. Given the slowdown in inflation and the political uncertainties in the US, the markets believe less and less in the possibility of a new rate hike by 2017.
Still strong sales on Foot Locker. Yesterday it lost another 9%, after -26% on Friday. The chain of sports shoe stores released its data for the quarter: revenues amounted to 1,7 billion dollars, down 4% year on year, against a consensus estimate of 1,8 billion. Like-for-like sales fell by 6%. Net income also fell sharply. Analysts also rejected Nike - 2,4%, after disappointing sales figures.
Oil is down sharply -2,4%. This morning Brent is trading at 51,83 dollars, Wti at 47.53. Yesterday the OPEC technical meeting for the management of production cuts was held. "OPEC's biggest problem concerns managing the increase in oil production in member countries," said Tamas Varga, an analyst at PVM.
TOTAL'S BIG SHOT: MARSK ENERGY BOUGHT. ENI AND SAIPEM DOWN
Big movements yesterday in the European energy market. Total +0,4% announced the acquisition of the Danish Maerks Oil & Gas for a total value of 7,45 billion dollars. The closing of the operation is expected in the first quarter of 2018. Thanks to this operation, the French group becomes the second producer in the North Sea after State il: the 500 barrels of extra production will allow the group to reach a production of 3 million barrels per day.
The Russian oil group Rosneft has finalized the purchase of the Indian Essar Oil by opening up new markets in Asia. The transaction values the Indian group that owns the Vadinar refinery, one of the most modern in the world and 13 service stations in India, at about 3.500 billion dollars. Eni fell by 0,7% to 13,15 euros. Barclays analysts cut the rating on Eni's stock from Neutral to Underperform with a target price maintained at 16 euros per share.
Saipem -1,7%. Barclays has cut the rating to Underweight from Equal Weight. Target revised to 3,80 euros from 3,90 euros. Tenaris -0,7%. Saras closes with a gain of 2,5% at 1,9210 euros. However, the title is struggling to recover from the post-quarterly shock, costing a loss of about 20% in less than two weeks.
OPENING UP FOR EUROPE. MILAN STILL AT THE TOP
The main European stock markets were weak in view of the Jackson Hole conference on Friday. Futures on European stock exchanges today anticipate a start up by 0,3%. In Piazza Affari, the FtseMib index closed in the red by 0,3% at 21.753. However, the Italian Stock Exchange has returned to being the best with a 13% gain since the beginning of the year. The worst stock exchange is Frankfurt which falls by 0,9%, Paris -0,9%, Madrid -0,3% and London by 0,1%.
In its monthly report, the German central bank explains that, after a second quarter of 2017 in which the country's GDP recorded the strongest annualized growth in over two years (+2,1%), strong sales are pushing further capacity utilization in manufacturing is high, fueling new investment by companies.
BTP AGAIN ABOVE 2%, RACE FOR ATHENS BONDS
The BTPs closed down after having passed into negative territory in the second half of the session, in a market that even today remains on decidedly summer trading levels. In the afternoon, after the opening of the US stock exchanges, risk aversion also increased for fixed income. The Italian 2-year rate touched 2,04%, a level that has not been holed down for about ten days, then reaching an intraday high of 160%. At the same time, the spread rose from 164 basis points in the morning to XNUMX.
There is a return of interest in the Greek governments. Fitch upgraded the rating to 'B-' from 'CCC' thanks to reduced political risk and sustained GDP growth. Fitch said it expects government debt to improve steadily, buoyed by benefits from the ESM program. 2-year yield below 3% for the first time since 2008. 5,45-year yield at 2%. Today the Spanish Treasury offers between 3 and 3 billion euros of government bonds at 9 and XNUMX months.
Rose Ouahba, head of fixed income at Carmignac suggests overweighting government bonds from the European periphery, including BTPs. “Investors – he writes – should take long positions on government bonds of Italy, Portugal and Greece, we particularly appreciate the BTP with a 2,2% coupon maturing in 2027. The BTP offers a good yield, given that the curve it's steep enough for Italian government bonds. We also like Greek government bonds, which offer a 4,75% coupon maturing in 2019. If Greek bonds were considered eligible for the ECB's Quantitative Easing program, which will lead to lower yields, they still have a chance of rallies".
MAIRE TECNIMONT SHINES AT ATLANTIA'S PLAZA BUSINESS
Little to report in the price list of Piazza Affari. The FCA effect was transmitted to Ferrari +0,57% and Exor +0,37%. Atlantia is also progressing +0,7%: the takeover bid for Abertis seems closer. The banking sector is weak: Intesa -0,7%. Banca Imi has paid the SEC $35 million to close an investigation into alleged violations of the ADR law. Unicredit -0,9%. Ubi -2% and Banco Bpm -1,7% also fell. Among the brilliant medium caps Maire Tecnimont +2,4%, on the highest since 2011. The Italian group will present an offer for the construction of a gas plant in Brazil, a project worth 1 billion dollars.
