Another weak session for the Asian stock exchanges weighed down by the uncertainty of the Chinese economy. This morning Beijing announced that imports fell by 13,8% in August, much more than expected. A fact that is only partially explained by the drop in crude oil. Meanwhile, Chinese reserves fell by $94 billion in August.
The Chinese Stock Exchanges are losing ground again in the middle of the day. Shanghai, down 1,3%, marks a decline from June's highs of 40%. The titles of the big banks and Petrochina are suffering. Tokyo was also down at the beginning of the afternoon session (-1,6%), despite the upward revision of GDP (-0,3%) in the second quarter.
Futures on Wall Street, closed yesterday for Labor Day, signal a moderately upward start. Once again, waiting for the Fed's rate decisions will hold the court.
BTP, ITALY GAINS 20 POINTS AGAINST SPAIN
Yesterday's session was sluggish for the European Stock Exchanges, orphaned by Wall Street. In Milan, the FtseMib index rose by 0,7%. The Paris and Frankfurt stock exchanges gained 0,5% and 0,7% respectively. The exception is Madrid (-0,17%): polls show that pro-independence supporters, who have promised a referendum on secession, have a good chance of winning the next elections in Catalonia.
The news had a significant impact on Spanish government bonds, which see the spread against the BTP exceed 20 Basis points (closing at 24 bps, the highest since August 2013). The Btp/Bund spread is stable at around 120 basis points. The Treasury announced that 7,5 billion 12-month BOTs will be offered at Thursday's auction.
The euro/dollar exchange rate is little moved at 1,116.
CHINA EFFECT, GLENCORE CUTS FOR 30 BILLION
The only thrill on the European price lists came from the raw materials sector (Stoxx of the sector +1,7%). Glencore, the world's number one commodity trader, rose 7% on the London Stock Exchange after announcing it will sell $30 billion in assets to reduce debt.
It is the robust response to the decline in trade with China which has reduced purchases of commodities, copper in particular. Glencore, listed in London four years ago after a capital increase of 60 billion which allowed the purchase of Xstrata, plans to halve the dividend, raise new capital (2,5 billion pounds) and sell the agricultural division.
The oil producers did little, grappling with a new drop in crude oil: Brent at 48,1 dollars a barrel (-3%), Wti at 44,7 dollars (-2,8%). Eni rose by 0,6%, Saipem +0,2%, Tenaris unchanged.
ENEL SUPERSTAR, WAITING FOR THE COUPON INCREASE
In Milan Enel shone +1,7%, after the CEO Francesco Starace said that the dividend referred to 2016 could be higher than now expected. UBS confirmed the buy recommendation and lowered the target price from 5 to 4,85 euros, a level which is still higher than current stock market prices.
Among other utilities Enel Green Power +0,7%. The company has completed and connected to the grid the Melowind wind farm, its first plant in Uruguay with 50 MW of installed capacity, located in the Cerro Largo area, approximately 320 kilometers from the capital Montevideo.
A2A (+1,5%) has started negotiations with the minority shareholders of Edipower to increase to 100% (from the current 79,5%) of the former genco Enel (which owns five thermoelectric and two hydroelectric plants of large size).
Terna instead drops by 0,3%. The company announced that electricity consumption in Italy grew by 4,8% in August compared to the same period a year ago. In the first eight months of 2015, the demand for electricity recorded a growth of 2,0% compared to the volumes of the corresponding period last year. With the same calendar, the result is +1,7%.
Atlantia -1%: do not like the prospect of a takeover in the United Kingdom.
TELECOM RISES UNDER THE VIVENDI EFFECT
Telecom Italia gained 2,2%. Nomura reiterated his bullish view on the European telecommunications sector. Meanwhile, the union agreement was signed with the suspension of redundancies.
After the Cernobbio meeting, new confirmations arrived on Vivendi's desire to direct the development strategies of the telephone company in which it is the first shareholder with 15%. In an interview with Bloomberg, the managing director Arnaud De Puyfontaine affirms that the investment in Telecom Italia will allow Vivendi to strengthen its positions in the market for the distribution of contents in southern Europe. De Puyfontaine also says he doesn't want to rule out the possibility that the French conglomerate could take over Telecom Italia.
Since the beginning of the year, the performance has increased to +25%.
MONTE PASCHI OFFERS 1,8 BILLION NON-PERFORMING LOANS FOR SALE
Limited progress for the banks. Credit Suisse confirmed its positive view on the European sector, explaining that it continues to prefer banks with a history of restructuring, those that generate more bank commissions and dividends.
Unicredit advances by 0,9%, recovering a small part of Friday's losses. Agreement unchanged.
Monte Paschi +0,6%. The bank has put up for sale a portfolio of NPLs (Non Performing Loans, i.e. non-performing loans) to small and medium-sized enterprises for approximately 1,8 billion euro. The portfolio, known as the "Eva Project", consists of secured and unsecured loans to small and medium-sized enterprises. The bank expects to complete the sale process between the end of the year and the beginning of 2016.
Good Pop.Emilia +2,5%. Among the insurance companies, Generali rose by 0,6%.
LUXURY TO THE RESCUE, FERRAGAMO BEST BLUE CHIP
In the Luxury sector, Ferragamo's recovery took off +4,3% to 23,48 euros, the best blue chip of the day. Which reversed a long negative cycle with six consecutive bearish sessions in which it lost a total of 13,5%. Highly exposed to the economic turmoil in Asia, where it generates over 30% of revenues, Ferragamo was heavily impacted by sales amid fears that the economic situation in China was seriously deteriorating. On Friday Goldman Sachs confirmed the Buy recommendation on Ferragamo, while reducing the target price to 30,80 euros from 35,1 euros.
Tod's +2,2%. Yoox was also positive (+2,3%) after the swings in the last few sessions following the resignation of the president of Net-a-Porter, a company with which a merger plan is underway. Yoox CEO Federico Marchetti predicted in an interview – “reassuring” according to Mediobanca Securities – that the integrated group will grow more than the market average and that sales in China are going well.
GM STILL IN FCA'S SIGHTS
Among industrial stocks, Fiat Chrysler +1,8%. On the sidelines of the Monza Grand Prix, Sergio Marchionne, the group's managing director, replied to journalists who asked if a hostile takeover bid for General Motors was out of the question: "I didn't say that, I didn't say anything, I just confirm our interest in General Motors".
Marchionne then added "that I'm not good at making predictions about the future". When asked if he has ever spoken to any of the General Motors shareholders, Marchionne replied: “If I did it was by chance, but I didn't go looking for anyone in particular to talk about this deal. I have absolutely no doubt, however, that I will have the opportunity to interface in some way with the shareholder base. We share part of the basic shareholders and therefore it can happen”.
StM +1,3%, Finmeccanica down 0,5%.
