D-Day has arrived. The Stock Exchanges are called this morning to judge the Great Entente resulting from the purchase for one euro of a large part of the assets of Popolare di Vicenza and Veneto Banca. The decision was made yesterday with a flash meeting of the Council of Ministers: twenty minutes in all. "An important, urgent and necessary decision - commented Minister Pier Carlo Padoan - which avoided a messy bankruptcy". The total amount of resources mobilized is 17 billion, even if the immediate disbursement to Intesa amounts to 5,2 billion. The figures have no impact on public finance balances, explained the minister, "because they are already incorporated in the bank-saving decree".
In summary, to ensure the reopening of the branches this morning, the healthy part of the institutions was sold to Intesa, guaranteeing full protection "of all savers and senior creditors". In fact, the aforementioned Decree Law provides for relief measures for holders of subordinated retail financial instruments. Customers, explains a note from the people of Vicenza, “do not suffer any consequences from this transition: the bank's offices and branches will be open regularly and fully functional; all banking operations can be carried out without changes, but under the responsibility of Intesa Sanpaolo”.
ALSO VIOLA AMONG THE COMMISSARS
The decree of the Ministry of the Economy for the liquidation and the appointment of liquidators by the Bank of Italy in the persons of Claudio Ferrario, Giustino Di Cecco and Fabrizio Viola arrived shortly after. The supervisory committee will be made up of Maria Elisabetta Contino, Francesco De Santis and Raffaele Lener.
What will be the reaction of the markets? The effect on the euro was negligible, indeed nil, recovering this morning to 1,1194 against the dollar. It is foreseeable that the operators intend to reward the determination with which Carlo Messina conducted the low-cost acquisition of the two Veneto institutes. The pressure on the banking sector, which has been the system's Achilles heel for at least two years, is also destined to decrease immediately. But the operation, the result of convulsive government negotiations on several tables (Brussels and Frankfurt in the lead), while representing an almost obligatory step, certifies the end of the bail-in in bands. One gets the feeling that: 1) the banking union has gone from being very difficult to almost impossible, as the furious reactions in Berlin suggest; 2) the risk premium for Italian finance is destined to rise.
Among the harshest critics, Luigi Zingales wrote that “it could not have ended in a worse way. The taxpayers who will have to pay about two years of Imu on their first house to fill up the hole will lose... Customers and employees will lose... but above all the credibility of the Italian and European institutions will lose for how the whole affair was managed ". It can be argued against this thesis that orderly liquidation, after so many mistakes, is probably the lesser evil, perhaps the only way to avoid the collapse of the system. One last consideration: the speculators have made a great deal of buying until a few days ago at 30% bonds of the two banks which were worth zero and will instead be repaid at par.
SPOTLIGHTS ALSO ON MPS AND CARIGE, UBI INCREASE CLOSES
However, the credit battle is not over. The exclusivity granted to the Atlante fund for the securitization of Monte Paschi's non-performing loans expires on Wednesday. The fund remained only after the defection of Fortress and Elliot, who deemed the demand for NPLs too high. However, the conclusion of the story of the Venetian banks frees Atlante from the commitments already made on the NPLs of the two banks.
An important week also for Banca Carige, which awaits the ECB's response to the latest proposal from the bank's top management: the establishment of a vehicle company, a consortium 51% owned by institutional investors and sector operators and 49% by Carige, to which to sell 2,4 billion of non-performing loans. Inflows and equity investments will also be sold to lower the size of the capital increase.
Finally, tomorrow, the Ubi capital increase, launched to support the acquisition of three of the four good banks (Popolare Etruria, Cassa Marche and Cassa di Chieti) sold by the Treasury, will close.
TREASURY AUCTIONS UNDERWAY. TOMORROW THE OFFER OF CTZ AND NTPEI
The state bloodletting for the Veneto banks falls on the eve of the end-of-the-month Treasury auctions. Tomorrow the ministry will make available to investors up to 3,5 billion euros between indexed Ctz and Btp. Wednesday 28 June May will be the turn of the six-monthly Treasury bonds maturing December 2017 for 6,75 billion euros (6,5 billion euros maturing). The yield of the 10-year BTP fell during the week to 1,90%, from 1,98%, with the spread narrowing by 6 basis points, to 164.
POSITIVE START IN CHINA, APPLE FACTORY FLY TO TAIWAN
There is not only the liquidation of the Veneto banks. This morning took place the surrender of Takata, the Japanese group crushed by the scandal of defective airbags. The company filed for bankruptcy in both Japan and the US under pressure from $8,1 billion in debt. However, the news, like Toshiba's new plunge (-6,9%) did not prevent a positive opening of the financial week: the Nikkei rose by 0,4%. China also did well: Shanghai and Shenzhen +0,7%, Hong Kong +0,5%. Of note in Taiwan is the 7,6% jump in Hon Hai, the iPhone factory. But a part of the stock exchanges is closed for the holiday which marks the end of Ramadan. The recovery of oil favors the rebound: Brent +0,5%, at 45.78 dollars, Wti at 43,22 dollars despite a new increase in active shale oil wells (+11 plants in the week).
THE BIS IS IN FAVOR OF RATING RATES
It's time for big events for the international banking world. Tomorrow the annual meeting of central bankers, organized by the ECB, will open in Sintra in Portugal in the presence of 150 guests. There will be no Janet Yellen (the first speech will be from former Fed chairman, Ben Bernanke), but a direct confrontation between Mario Draghi, Marc Carney, governor of the BoE, the Japanese Haruhiko Kuroda and Stephen Poloz, number one from the Bank of Canada. Simultaneously, on Tuesday, Yellen will speak on the topic of the global economy.
On the eve of the Sintra meeting, the annual report of the Bank for International Settlements launches a warm invitation to central banks to raise the cost of money to "normal conditions". The low inflation, reads the report, is a consequence of technological progress and work organization: explicit support for the Fed's policy of increases.
On Wednesday evening, with the Stock Exchange closed, the Fed will announce the second part of the stress tests on US systemic banks. An analytical picture of the state of health of each of the 34 banks examined will be obtained, from which it will be possible to draw indications on dividends and on the forthcoming buybacks.
EU AND MEXICO, IN VIEW OF ANTI-TRUMP AGREEMENT
Eurozone diplomacy is in great turmoil. Today the Brussels delegation will meet with the Mexican government. The renewal of the free trade agreement is under discussion, the second with a country in the NAFTA area, an eloquent response to Donald Trump's protectionist policy which aims, without results, at bilateral agreements with states after having buried the inter-Atlantic agreement. But it could also be the decisive week for the trade agreement between the EU and Japan. The abolition of Japanese duties on food (canned tomatoes and cheese) and the parallel removal of those on cars in Tokyo are under discussion.
SPOTLIGHT ON NIKE ACCOUNTS ON WALL STREET
Wall Street's attention will focus on Thursday the 29th on Nike's accounts. The stock lost ground after the announcement of a restructuring plan, but a report by Goldman Sachs anticipated to Friday the forthcoming launch of an alliance to sell products via Amazon.
Great attention during the week also to the numbers of Monsanto and Walgreen Boots Alliance. Market forecasts for the next earnings season are not brilliant. Analysts' estimates have been revised downwards for 10 of the 11 sectors of the Dow Jones index (only industrialists are saved). S&P 500 index profit growth should be around 7,9%, down from 15,3% in the previous quarter and on the most recent forecasts (+10,25). The slowdown is linked to the trend of oil.
TODAY THE STM DIVIDENDS, AWAITING FOR THE MEDIASET SHAREHOLDERS' MEETING
On the agenda of Piazza Affari, today's distribution of the Stm dividend should be noted. Spotlights on the Mediaset assembly on Wednesday 28. It will be an opportunity to activate the Vivendi anti-takeover measures.
It was a slow week for Piazza Affari and for the other European stock exchanges. The Milanese FtseMib index fell by 0,4% in the last five sessions. The Paris Stock Exchange closed the week with an increase of 0,1%, Frankfurt -0,1%, the Euro Stoxx 50 index unchanged.
GEDI ARRIVES IN THE PLACE OF BUSINESS. THE ESSELUNGA PROCESS BEGINS
The arrival of excellent freshmen in Piazza Affari is looming. On Friday Consob gave the go-ahead for the publication of the listing prospectus on the stock exchange for Gedi, born from the merger between the l'Espresso publishing group and Itedi. This was disclosed in a press release by the company, in which it is recalled that the prospectus concerns the admission to trading on the market of 96.651.191 shares, issued following a capital increase of 79,969 million euro. The issue of the shares is expected by 30 June. Marco De Benedetti was appointed to the presidency of Gedi, thus succeeding his father Carlo.
In the meantime, the times, however not short, are getting shorter for the most eagerly awaited IPO: the offer from Esselunga. Phase one of the operation could kick off during the week, with the acquisition of the entire capital of the real estate Villata Partecipazioni, the group's real estate safe. Once some heirs (the entrepreneur's first-born children) have been liquidated, the merger with Supermarkets Italiani will take place, the holding company which at that point will have brought together supermarkets and properties and which will be subject to listing, probably in more than a year. The Italian large-scale retail chain closed 2016 with sales (current network) up 3,1%, to 7,5 billion euro. A slowdown compared to 4,3% in the previous year.
THE SPRINT FOR DUCATI PUSHES PIAGGIO. BEWARE OF FERRARI
The negotiation for the sale of Ducati to the American Harley-Davidson (-1,6% on Friday at Wall Street) also touches Piazza Affari due to the effects on Piaggio, another two-wheeled Made in Italy company, and on Ferrari, the symbol of luxury on engines. The little red horse closes the trip to Baku with the fourth place of Sebastian Vettel who, however, earns points over his rival Hamilton.
Spotlights also on Fiat Chrysler, which announced the temporary withdrawal of Pacifica, the Chrysler minivan also used by Google as the basis for the self-driving car.
