Fasten your seatbelts. From the outset, 2016 promises to be a very turbulent year. Shanghai threw in the towel in the first session of the year: in fact, the Stock Exchange suffered a drop of more than 7% in the afternoon under a shower of sales. But, according to the new rules in force from today, a drop of more than 7% causes the immediate closure of the session. In short, everyone at home.
The landslide was triggered by the disappointing performance of manufacturing activity, which fell in December for the fifth month in a row, the likes of which has not happened since 2009, according to data from PMI data. It was the spark that triggered the fall of the yuan, today one step away from the historic threshold of 6,50 against the dollar, to its lowest since May 2011 after the fixing with the Central Bank. This has triggered a chain reaction on the markets, worried about the prospect of a currency war.
Tokyo loses 2,6%, closely followed by Hong Kong (-2,1%) and Korea (-1,9%). Asian currencies and the Australian dollar weaken. Vietnam has lowered the official parity against the dollar, as it hasn't happened since the August crisis. Meanwhile, the yen is advancing (120,30 against the dollar) and the euro is also moving upwards (1,0870 against the US currency).
OIL BOUNCES. NEGATIVE OPENING FOR EUROPE
The escalation of the confrontation between Shiite Iran and Saudi Arabia, which recalled ambassadors from Tehran after the explosion of anger over the execution of Iman al Nimr, has caused a rebound in crude oil prices: Brent now trades at 37,95 dollars a barrel (+1,8%) after having touched 39 dollars, the American WTI trades at 37,5 dollars (+1,3%).
Meteo Borsa thus signals a downward start also for the European stock exchanges. In addition to the factors of crisis arriving from the East, the progress of the Eurozone will be held back by the difficulty of ensuring a government in Spain, with effects both on shares and on the debt market. The PMI data on the manufacturing activity of the main economies will be released in the morning. At the start, futures show London -37 points, Paris -33 points and Frankfurt -162 points.
LA ROSSA AND FIAT CHRYSLER LOOKING FOR THE RIGHT PRICE
The geopolitical and currency turmoil shouldn't spoil the party of the Italian Stock Exchange, best list of 2015. The new year opens at 9 with an exceptional show: the Italian debut of the Ferrari title, escorted to Palazzo Mezzanotte by a selection of fabulous "Rosse" and by a procession of VIPs: in addition to Sergio Marchionne, John Philip Elkann and Piero Ferrari, ready to repeat the Wall Street ceremony, there will also be Prime Minister Matteo Renzi. Beyond the media aspects, today's event kicks off a new life for both Ferrari and the former parent company Fiat Chrysler, now orphaned by Enzo Ferrari's creature.
In the next few days, FCA shareholders will in fact receive one Ferrari share for every 10 FCA shares they hold, plus an adjustment of 1 euro cent. The physical assignment of the shares will take place tomorrow (or the day after tomorrow for securities not kept in Monte Titoli). The first day of regular listing of the Ferrari shares deriving from the spin-off will be Friday 8, when, once the process is complete, it will finally be possible to have a more precise idea of the value recognized by the market for Ferrari and the slimmed-down FCA.
MARANELLO STARTS FROM 44 EUROS. THE “NEW” 8,5 FCA
The last market prices before the separation assigned Fiat Chrysler a price of 12,9 euros, Ferrari 47,9 dollars on Wall Street (against the placement at 52 dollars). At a euro-dollar exchange rate of 1,092, it resulted that the shareholder with ten FCA shares will find himself this morning also owning a Ferrari share worth 43,94 euros. Since the ratio is 1/10, it follows that the value of FCA, net of Ferrari, is 8,51 euros (or 12,90 euros – 4,39 euros).
Is that the right price? US analysts are divided on Ferrari: out of the six covering the stock, two suggest buy, two suggest hold, finally two suggest sell, underlining the modest weight of merchandising on the company's turnover: no more than 20%, a little to classify the company more as a luxury brand than a car manufacturer. It will be important to understand how the market will digest the increase in the free float and absorb the inevitable arbitrages. Until now, with the listing on Wall Street, only 10% of the capital was in circulation, from today it rises to 66,5% (23,5% is controlled by Exor, 10% by Piero Lardi Ferrari).
No less interesting are the questions for Fiat Chrysler at the beginning of a year that could prove decisive for a merger with a competitor. In the meantime, operators are already concentrating on the accounts for the fourth quarter, to be released at the end of January. It will be an opportunity to take stock of the prospects for Alfa Romeo, Maserati and Jeep. For now, despite the brilliant 2015 stock market performance (+35%, second only to Renault) net of Ferrari, Fiat Chrysler is trading at an Ev/Ebitda multiple 30% lower than the sector average.
Finally, tonight, the data on car registrations in Italy in December will be communicated.
ANSALDO STS, HOT DUEL ON THE TAKEOVER OFFER
Thanks to the news from the Agnelli house (not to be overlooked the next definitive entry of Partner Re into the Exor portfolio), Piazza Affari will be at the center of attention today. But there are other news worthy of attention.
As of this morning, Finmeccanica has abandoned its role as a holding company, transforming itself into a "one company" divided into seven divisions active in four sectors. The new name of the company will be announced in a few weeks. But this morning the eyes of the market are focused on Ansaldo Sts. The board of directors of the company, after a river session, split in half on the evaluation of the price established for the sale to the Japanese company Hitachi. Four directors have deemed that the price of the takeover bid (scheduled from today), set at 9,5 euros, is not adequate. Four others considered the price fair, one abstained. The takeover bid will start regularly, given that it was not a binding opinion, but the split could affect the judgment of Consob invoked by various investment funds: Finmeccanica, according to the allegations, would have applied a discount on Ansaldo Sts in exchange of a higher price for Ansaldo Breda, not listed.
BANKS IN THE BALANCE BETWEEN THE MERGER EFFECT AND THE BAIL IN
No less historic are the innovations in banking matters. The bail-in has been in force since this morning, a source of concern but also the detonator of the next inevitable big bang of our credit. It is no coincidence that the Italian Popolari closed the year with stellar performances, starting with Banca Pop.Milano (+70%), in the middle of the ford between Banco Popolare (+28%) and Ubi. The coming months will be decisive for this and other increasingly urgent mergers. It should be noted that in Europe the Stoxx index of the banking sector closed the year down by 2,6%.
FISCHER (FED): WE WILL USE THE WEAPON OF RATES RISE
It will be a week full of statistics and macro data after the holiday break. In Europe, the trend of inflation due out on Thursday stands out. On the same day, Istat will release data on employment in Italy. Consumer confidence data is also out.
In the US Stanley Fischer, vice president of the Fed, has already stirred the waters over the weekend by noting that the central bank will have to raise interest rates if the economy shows signs of overheating. A comment that comes in the run-up to the publication, Wednesday evening, of the minutes of the last meeting of the Fed which decided on the first rate hike in eight years. December US employment data will arrive on Friday.
