In a list targeted by bank sales, stimulated by the downgrading of the Italy rating decreed by the Canadian agency Dbrs and by the new accusations against Fiat Chrysler, only the star of Luxottica shines. The Ftse Mib index dropped by around 1,2% at mid-day to around 19.200 points. Also a discount Paris (-0,5%). Frankfurt -0,6% and Madrid 0,8%. Float on parity London, supported by the renewed decline in the pound.
The positive note concerns Luxottica (+8%) after the announcement of the merger with the French Essilor (+13%). The Italian group, already world leader in frames, joins forces with the French company specializing in the production of ophthalmic lenses, in an operation worth around 46 billion euros in terms of capitalization (24 billion for the Italian company at Friday's prices, 22 for the transalpine).
Leonardo Del Vecchio, who through Delfin controls Luxottica, will become the first shareholder of EssilorLuxottica, with a stake between 31% and 38%, he will be executive chairman and CEO, says a statement. The transaction will take place through the launch of an offer by Essilor for Luxottica based on an exchange ratio of 0,461 Essilor shares for each Luxottica share. The new stock will remain listed on the Paris Stock Exchange.
The merged company will have combined revenues of more than $15 billion, more than 140 employees and a presence in over 150 countries. Kepler-Cheuvreux has adjusted the shot after this morning's news. The broker promoted the recommendation to Buy from Reduce, raising the target price to 56 euros from 44 euros.
sapphire (+4%) reflects the Luxottica-Essilor deal. Strong growth in Frankfurt Hugo Boss, which jumped up 7,8% on the Frankfurt Stock Exchange after the accounts. Luxury also does well in Piazza Affari: Moncler + 1,2% Ferragamo + 1,1%.
Modest reaction of the bond market to the cut of the DBRs. The Btp/Bund spread widens by 4 basis points to 159 with a ten-year yield of 1,89%. The Italy/Spain spread is unchanged at 49 basis points.
On the contrary, the downgrading weighs on the banking sector. Unicredit drops by 2,8%, Understanding -1,5% Bpm bank -3,2% also due to the effect of the news of the investigation by the judiciary into the hypothesis of market manipulation on alleged possible omissions in the communication to the market of data on the coverage of non-performing loans.
Generali loses 2,9%, downgraded to Sell by Deutsche Bank. Unipol -1,7%.
Financials are also down in the rest of Europe. Among others, Royal Bank of Scotland and Spain's Banco Popular lose around 3%.
According to Mediobanca Securities, the DBRS decision has two possible indirect effects. First, smaller banks with limited market access and more severe liquidity problems could suffer much more, thus accelerating the process of restructuring and consolidation.
Secondly, if and when sovereign bond risk resurfaces, a BBB rating could lead to the need to change the business model of Italian banks and possibly the criteria they use to meet liquidity requirements and avoid consequences on Cet1.
The automotive sector is also in the bear's sights after the words of Donald Trump: the US president has announced that he will impose a tax on German vehicles imported into the US. bmw, Daimler e Volkswagen they drop between 1,5 and 2%.
Fiat Chrysler loses 3,9%: according to Fitch, the complaints of the US environmental protection agency, which has targeted the emissions of some car models produced by FCA, could, if they prove to be founded, put pressure on the group's rating . Great Britain has made an urgent request for information to the US agency for environmental protection (EPA). Exor loses 2,9%.
Among other industrial stocks, Leonardo loses 0,9%, StM -0,2%. Bad day also for energy and utilities. Saipem falls down by 3,8%, to 0,493 euros. The Australian broker Macquarie intervened on the stock today, cutting the recommendation to Underperform from Neutral, the target price is 0,45 euro.
Analysts are strongly divided in their opinions on Saipem: 20% recommend Buy and 35% recommend Sell. The average target price is 0,46 euro. Last week Goldman Sachs removed the stock from the Conviction Buy List, while confirming the Buy judgment and the target of 0,59 euro.
Enel retreats 1%, Telecom Italy -1%.
