"PORTUGUESE" MAZZATA ON THE MILAN STOCK EXCHANGE (-1,74%)
THE EU IN THE FIELD AGAINST MOODY'S VOTE IN LISBON
The European Union is not there. Indeed, the Commission in Brussels has officially taken the field to contest the retrocession of Portugal's debt to the rank of junk bond, decided by Moody's. A choice, motivated among other things by the "high probability" of a new aid package to avoid default, which has sown panic in the "peripheral" stock exchanges, starting with Milan which, more than any other European market, pays the Lisbon downgrade: The FtseMib index loses 1,74% (to 19924) with banks in sharp decline. Conversely, Frankfurt marks a modest increase (+0,06), Paris almost unchanged. The effect on the City was also modest (FTSE -0,24%).
TRICOLOR BANKS IN FREE FALL
THE CDS ON ITALY RISE TO 220 BP
Intesa loses 3,71%, Unicredit 4,37%, MontePaschi drops by 5,08%, after Goldman Sachs lowered the target to 0,9 euro from the previous 0,93 euro. For Intesa, exposure to the bonds of countries at risk is 2 billion, for Unicredit 1,7 billion. Ubi (-4,66%) , Banco Popolare (- 3,65%) and Bpm (- 3,55%) were also down after, in a surprise move, Bpm announced the purchase of the property from the CR Alessandria foundation where the bank itself is based (80% controlled by Bpm itself and 20% in the hands of the foundation) for 48 million. As part of the agreement which makes possible the merger of Cral with other entities (see Banca di Legnano). Moody's downgrades Portugal's debt to 'junk' pushes up the cost of insuring against Italy's default. Indeed, Italy's 5-year credit default swap (CDS) rose 24 basis points from yesterday's close to 220 basis points, according to Markit. This means that it costs €220.000 to protect €10 million of exposure to Italian securities. A similar upward movement for the 5-year CDS of all peripheral countries. In particular, the cost of insuring against the Portuguese default rose by 82 points to 850 basis points. Meanwhile, the Wall Street Journal casts new shadows on the "voluntary" bailout of Greece by French and German banks, meeting today in Paris to seek a solution after the halt to the French S&P's plan. Europe's hopes for a significant contribution from private bondholders to a fresh Greek bailout are dwindling as it becomes increasingly clear that banks have shed a significant share of Athens' government bonds, despite calls by many to avoid such sales”. Thus began a long front page article in the Wall Street Journal. The country has about 64 billion euros of securities maturing over the next three years and several eurozone leaders hoped that the banks that own a large part of them would decide to continue holding them, extending their maturities, in order to give relief to finances hellenic. There has been talk of private participation for 30 billion euro of securities, but "this target appears unrealistic", explains the WSJ: "the problem is that banks and insurers at the negotiating table no longer hold so much debt in expiring in 2014, as was the case a year ago"
NEW LANDSLIDE FOR FONSAI
TODAY THE BOD ON ISVAP
ATLANTIA HOPES TO CONVINCE TREMONTI
In addition to the banks, insurance companies fell heavily in Piazza Affari: Generali i -2,1%, Fonsai lost 7,21%, after the 6,7 accused by the stock in yesterday's session. To exclude that Fondiaria Sai is penalized by the presence of Portuguese bonds in its investment portfolio, its exposure to Lisbon bonds is equal to 10 million euros. Today the board of directors of Fondiaria Sai examines the findings raised by the Insurance Supervisory Institute regarding governance, risk management and relations with related parties. The Antitrust will instead decide tomorrow on the share crossings determined by the participation of Unicredit in Fondiaria-Sai. Among the Milanese blue chips, Tod's also falls below parity (-0,21%). Parmalat (-4,01%) marks an almost “banking” decline while Fiat limits the decline to -0,78%. Finmeccanica (-1,38%), through its subsidiary Alenia Aeronautica, was awarded a contract worth about 200 million dollars for the supply of four C-27J tactical transport aircraft to Mexico. Atlantia (-2,63) expects to be able to convince the government to cancel the rule that modifies the amortization times of state concessions, said the managing director Giovanni Castellucci yesterday afternoon during a conference call with analysts and investors. For Atlantia, the approval of the regulation that fixes the amortization rate of concessions at 1% would lead to a negative impact equal to 500 million euros, 6% of the capitalisation. Meanwhile, Citigroup lowered its target to 15,5 euros from the previous 17,14 euros
TIMEDIA SALT FOR MURDOCH EFFECT
BUY EQUITA ON THE EXPRESS
Among the small caps Telecom Italia Media rises +4,4% on rumors of a possible interest by the Murdoch group. The other takeover candidate, the l'Espresso group, will present its results on 20 July. Equita expects an unchanged Ebit in the second quarter (in the first it had grown by 30%) with an increase in advertising of 2,3% (+4.9% in Q1) and a drop in circulation of 1,8% (factor now in contraction by 35% on average). Radios are expected to drop by 8-10% in terms of advertising sales. For the full year, analysts cut their estimates from +3.3% to +2.5% and the estimate of returns from circulation is now unchanged from the previous +2.5% because price increases on local newspapers have been postponed to 2012. Equita increases the cost base by 1% for the higher cost of the card and lowers the profit estimate by 5%. The target price also drops by 8% to 2,3 euros per share, even if the rating remains "buy".
SABAF DOWN (-11%) ON PROFIT WARNING
GERMAN JV FOR SAES GETTERS
Sabaf falls -11% after yesterday announcing a profit warning with a downward revision of its estimates for 2011. With the markets closed, Sabaf has announced that it will not be able to meet its 2011 revenue and EBITDA targets. The new targets for the current year forecast a growth of between 2% and 4% for sales (from the previous +10%) with an Ebitda margin from 21% to 22% (from the previous range from 23% to 24%). Saes Getters announced yesterday that it has set up a joint venture (called “Actuator Solutions”) with the German company Alfmeier Präzision for the development and manufacture of actuators made with Shape Memory Alloys technology. According to the press release, Actuator Solutions will start production in the fourth quarter of 2012. The joint venture represents a kind of integration in a sector, that of actuators, which is very promising for industrial applications of shape memory alloys. In this way Saes strengthens its competitive position and becomes able to derive greater value from its technological leadership.
