“The ECB is ready for any eventuality following the British referendum”. Mario Draghi dusted off the "whatever it takes" argument against the risk of a market collapse yesterday in front of the European Parliament in case of victory of the yes to Brexit. No less determined was Janet Yellen, who spoke a few hours later in the US Congress. Brexit, the Fed chairman said, could have significant repercussions on the US economy, and for this reason the Fed is closely monitoring what is happening globally.
The cordon sanitaire of the central banks has limited the pressure on the markets, slowing both due to the approach of the British D-Day (the polls will open tomorrow, the official results are scheduled for 8 on Friday 24) and, no less important, due to the messages sent by central bankers, far from euphoric about the prospects for recovery.
WALL STREET KEEPS TECH, ASIA BRAKES
Hence an unstable balance that characterized the financial day, after the strong increases on the eve. Wall Street closed slightly higher: S&P and Nasdaq +0,14%, Dow Jones +0,17%, despite the Fed's warning on the "above average" levels reached by technology (tech stocks are worth 16,7 times earnings , versus 14,6). Tesla (-13%) announced a card-to-card purchase offer worth 2,8 billion dollars on Solar City, a leading company in the field of solar energy already controlled by Elon Musk, father-owner of Tesla.
Asian stock exchanges are holding back, cautious on the eve of the British vote. Tokyo drops by 1,2%, Hong Kong (-0,4%) and Chinese lists are also down.
BANKS AND INSURANCE SUPPORT EUROPE
European stock markets rallied sharply towards the end. Milan closed with the FtseMib index up 0,45% to 17.431 points, London +0,36%, Madrid +0,23%. More consistent increases in Paris (+0,6%) and Frankfurt (+0,5%). The rise in the European Stock Exchanges was driven by Banks (Stoxx of the sector +1,4%) and Insurance Companies (+1,4%).
The dollar strengthens against the euro, but it would be more correct to say that the euro slips against the US currency to 1,126, from 1,131 the day before after the central bankers' statements. After yesterday's jump, the pound is down 0,2% against the dollar and gains 0,3% against the euro.
Safe-haven assets are still declining. Gold loses 1,7% to 1.267 dollars an ounce. The ten-year BTP yield rises to 1,395% from 1,371% at the end of yesterday's session, but remains below the peak from mid-February to 1,50%. The spread goes back to 133 points. According to Maria Cannata, head of public debt, even in the event of Brexit, the volatility that could hit the bond markets "shouldn't last long".
Oil down with Brent trading at 49,7 dollars an ounce (-1,8%), Wti at 49 dollars (-1,8%).
FROM ECB AND FED DOUBTS ABOUT THE RECOVERY
In addition to the ups and downs of the polls arriving from London and the pro-EU declarations of George Soros and David Beckham, the financial day was marked by the words of Mario Draghi and Janet Yellen, who did not limit themselves to reiterating their full support to the enemies of Brexit. The two central bankers have not hidden their concerns about the recovery. Draghi said euro zone growth is gaining momentum but uncertainty is high and inflation prospects are weak, so the European Central Bank stands ready to act if needed. Good, in this regard, the sentence of the German Constitutional Court who fulfilled, after three years, the OMT purchase plan, i.e. Draghi's bazooka.
Janet Yellen, speaking to the US Senate, was very cautious about the size and solidity of US growth, adding that, in addition to Brexit, some risk factors hang over the global economy: the slowdown in American productivity, above all, but also the of China, halfway across the ford. At this point, a hike in US rates at the next Fed meeting is unlikely. Indeed, according to James Bullard, president of the Saint Louis Fed, it is difficult to think of hikes for the whole of 2016.
BANCO POPOLARE, RISE ALMOST IN PORT. VENETO BANK DISASTER
Another day of banking in Piazza Affari. In the spotlight first of all the capital increases. The Banco Popolare operation concludes today (+0,3%, at 2,8920 euro). According to sources from Mediobanca and Merrill Lynch, the banks in the consortium, today institutional investors could cover the entire book of the increase (one billion). Up to now, 400 million euros have been raised. The new shares of the capital increase are issued at 2,14 euros.
On the other hand, the black smoke for the Veneto Banca operation, expiring today, is discounted. The amount covered would be "around 1%" of the total and therefore equal to approximately 10 million euro. Therefore, the intervention of the Atlante fund was inevitable. The official data will be announced tomorrow and institutional investors will then have until Friday to intervene if necessary. Hypothesis that, however, barring surprises, appears decidedly unlikely.
FROM SOCGEN A BUY FOR UBI AND INTESA
A report by SocGen has given wings to some stocks in the sector. Ubi goes up (+3,6%), on which the French broker Banca Lombarda with a Buy opinion and a target price of 3,60 euros. The bank headed by Victor Massiah is said to have started negotiations with the CR Cuneo Foundation and the Banca del Monte di Lombardia institution to purchase the stakes held by the two foundations in Bre and Comindustria "paper for paper".
Intesa Sanpaolo was also in great evidence, one of the liveliest banking stocks with a gain of 2,5% at 2,1540 euros: Société Générale has raised its recommendation to Buy from Hold, the target price is set at 3,0 euros.
In addition, the group sold the 15% stake in Visa Europe to Visa Inc, realizing a capital gain of approximately 150 million euros which will be booked in the second quarter of this year.
According to Kepler Chevreux, in the event of the victory of "Remain" in the English referendum, Intesa would be one of the European banking stocks to have in your portfolio together with SocGen, Deutsche Bank, Natixis, ING and KBC. In case of victory of the "Leave", analysts predict negative repercussions on the sector, but in any case, Intesa would be preferred together with SocGen and ING.
BIG MOVEMENTS ON SOUL. CALTAGIRONE RISES AGAIN IN GENERALI
In the rest of the sector, Monte Paschi loses ground (-1,4%): SocGen has started hedging with a Sell judgment and a target price of 0,46 euro. Unicredit +0,9%, Pop.Milan -0,2%. The Piazza Meda institute is evaluating whether to reduce its stake in Anima Holding or whether to launch a takeover bid together with Poste Italiane after Consob clarified that a 25% takeover bid threshold is applicable for the asset manager. Meanwhile, Anima, the best blue chip of the day, scored a rise of 6,5%, to 5,10 euros. Ubs promoted the stock to Buy, confirming the target price of 6,80 euros.
Among the insurance companies, Generali +1,8%. Francesco Gaetano Caltagirone rounded off his stake in Generali again, rising to 3,19% of the capital and becoming the second largest shareholder behind Mediobanca (13,21%) and ahead of Leonardo Del Vecchio's Delfin (3,16%).
ENI SKIPS THE SALE OF VERSALIS. SAIPEM, MAXI BOND COMING SOON
Positive day in Piazza Affari for oil producers, despite the decline in crude oil. The interruption of negotiations with the American fund SK Capital for the sale of a majority stake in Versalis did good for Eni (+1,27%). The parties noted "the impossibility of reaching an agreement on some negotiating points including, in particular, the future governance of the company". From the next six-monthly report, the six-legged dog "will once again fully consolidate Versalis in the group accounts".
Saipem was one of the top blue chips with a gain of 3,33%. Yesterday it rose by 6%. The quotation returns to the levels of the beginning of May. Yesterday Mediobanca raised its target price by 10%, bringing it to 0,44 euro from 0,39 euro. However, the judgment remains neutral. The company, Brexit permitting, is preparing to launch a bond issue that could reach 1,5 billion euros in a single solution. The bond would mark the debut on the debt markets by the Italian number one in plant engineering.
Among public utility services, Terna's decline stands out (-1,69%). Snam -0,48% and A2a -0,85%. The post-election decline of the Roman utility Acea continues (-0,55%). Instead, Iren rebounds (+1,74%), after the slide on the eve. Telecom Italia fell by 1,1%. Enel +0,2%.
BREXIT BRAKES LEONARDO, SLIPS CNH
On the industry front, Leonardo-Finmeccanica is holding back (-0,45%), pending the vote on Brexit: "Europe is moving towards common defense projects, but obviously if Great Britain leaves the EU it will be quite difficult have the same opportunities in the future”, said Mauro Moretti, CEO of the group.
Sharp decrease of CNH (-2,44%), engaged in the tender for the production and supply of prototypes of new generation amphibious combat vehicles (ACV) to the US Navy. The tender currently sees two contenders: on the one hand the British Bae Systems, together with Iveco Defense Vehicle, a company controlled by the Iveco group, on the other Saic. The contract has a total value of around 1,2 billion dollars. Fiat Chrysler (-0,24%) and Ferrari (-0,94%) were also weak.
Among the luxury stocks, Yoox rose by 1,4%, Ferragamo -1,1%.
RCS WEAK, WAITING FOR THE RELAUNCH OF BONOMI
Rcs is lagging behind (-0,5% to 0,76 euros), in any case above the offers from Cairo and the Bonomi consortium. The increase in the Cairo share, which rose by 1,52% to 4,396 euros, in fact brings the RCS valuation to 0,703 euros, given that the exchange rate (improved last Friday) is 0,16 Cairo shares for each RCS share. As for Bonomi, the market assumes a raise coming on Friday. Meanwhile, the new CEO of Sole 24Ore Gabriele Del Torchio has ruled out the possibility of aggregation with RCS.
