Rising oil, recovering stock markets. Piazza Affari is buzzing with the prospect of developments in the France-Italy axis in telecommunications and the media. Here is the picture just a few hours after the never-so-awaited meeting of the ECB.
At 13 pm Mario Draghi will illustrate the measures taken by the ECB to counter deflation and the slowdown in the economy. There was no shortage of critical positions taken on the eve: the German banks, led by the association of regional banks (30 billion deposits, 1.000 million customers) warned Frankfurt against the risks of a further drop in interest rates. Similar warnings have come from the world of life insurance, with the support of authoritative bankers such as Sergio Ermotti of Ubs.
But, after the December backtracking, Draghi cannot afford to disappoint the markets again, which take for granted the increase in monthly purchases of around 10 billion euros and the further cut in the deposit rate from -0,30% to -0,40%. To surprise positively, the ECB could possibly decide to expand the range of securities that can be purchased, including some "non-investment grade" securities. But the sharp rise in commodity prices (oil +50% from the January lows) could weigh against the new expansionary measures, radically changing the deflationary picture painted a few weeks ago by Mario Draghi himself.
NASDAQ BUYS ISE (1 BILLION). FLY THE OIL
All US stock market indices rose in the evening, closely linked to the trend in oil prices. The Nasdaq is up 0,6%, Dow Jones +0,2% (again over 17 thousand), Standard & Poor's 500 +0,5%. Wall Street thus celebrated the birthday of the Bull: from the lows of seven years ago, reached on March 9, 2009 after the shock of Lehman Brothers (673,56 points) the S&P index has tripled: it is the longest upward phase since the end of World War II.
The Nasdaq acquired control of the ISE, the International Stock Exchange, sold by the German Stock Exchange, which is ever closer to merging with the London Stock Exchange. The electronic price list was valued at one billion dollars, against the 2,8 paid in 2008 by Frankfurt.
Asian markets were mixed despite the shock of New Zealand's surprise rate cut. The Nikkei index rises in Tokyo (+1,4% at mid-session), while Hong Kong's Hang Seng is also positive (+0,8%). The Chinese markets were negative: Shanghai -1,1%, Shenzhen -0,8%.
OPENING BULL IN EUROPE. SPREADS BELOW 120 BPS
The European stock exchanges are positive pending the Frankfurt verdict. This morning, an upward opening is expected in Paris (+0,4%) and in Frankfurt (+0,5%), with a slight decrease (-0,1%) for the start of the City. In Milan, the FtseMib index rose by 1% yesterday with widespread increases in all sectors, the Paris Stock Exchange gained 0,4%, Frankfurt +0,3%. The increases were driven by companies in the Media sector (European Stoxx for the sector +1,2%) and Utilities (+0,9%).
The Btp/Bund spread fell below 120 points yesterday. The Treasury has announced that tomorrow between 6 and 7,5 billion euros of three- and fifteen-year BTPs will be auctioned together with the new seven-year March 2023.
MEDIASET'S PAY TV TOWARDS BOLLORE' WHICH ALSO PAYS WITH VIVENDI SHARES
The absolute queens of Piazza Affari were the protagonists of the last Italian-French match: Telecom Italia rose by 1,4% after French President François Hollande publicly called for a merger with Orange yesterday (+1,4% in Paris) , of which the transalpine government is the first shareholder with 23%.
An even more significant leap was made by Mediaset, rising by 6,8% in view of an imminent agreement on the sale of pay TV. Representatives of the Berlusconi family are discussing the sale of Mediaset Premium, plus other possible industrial agreements, with Vivendi, the main shareholder of Telecom Italia. At stake is an all-out alliance between the two groups, to create a European TV pole capable of competing with Sky and Netflix both in terms of sports rights and the purchase of films and TV series. The negotiations are conducted directly by Piersilvio Berlusconi, managing director of Mediaset, and by Yannick Bolloré, son of the Breton tycoon, president of Vivendi and a great shareholder of Mediobanca. The pay TV of the Biscione would be paid for 50% in cash and 50% in Vivendi shares.
Retelit also rose sharply (+2,08%). Inwit, the company of the Telecom towers, would have prepared a non-binding offer to acquire part of the plants of the subsidiary of the Mediaset group. The decision will be made by the Inwit Board of Directors scheduled for next Friday which will also examine the reverse proposal: the sale of a stake to the F2i and Cellnex tandem or to Ei Towers itself.
BOFA GIVES THE CHARGE TO ENEL +3%
In anticipation of the probable drop in the cost of money, the utilities raise their heads. Enel leads the race (+3%), also supported by Bank of America which reiterated the Buy recommendation. In its report, the investment bank underlines that the Italian group is traded at a P/E multiple of 11,8, at a discount compared to its "comparable" competitors: the French Engie (which capitalizes 33,7 billion euros with a P /E of 12,5) and the UK's Centrica (stock valued at £11,5 billion with a P/E of 14,7).
According to the US broker, Enel, which has a capital of 35,6 billion euros, is undervalued compared to the growth potential of the dividend, which could rise by 30% between 2016 and 2018, with a yield rising to 6,3% from the current 4,9%. Enel's strengths are its consistent presence in renewable energies, which is being strengthened with the imminent merger with its subsidiary Enel Green Power, and investments in the grid.
Terna advanced by 0,9%, Snam +0,1%. Yesterday the EuroStoxx index of the Oil & Gas sector also grew +0,5%. Eni gained 1,1%, positive Tenaris +1,8%. Saipem rebounds +2,9% after Tuesday's collapse (-14%).
BPM EXCEEDS BANCO POPOLARE: YOU HAVE TO WAIT FOR THE WEDDING
Banks holding their breath waiting for the ECB's rate decisions. The big names are on the rise: Unicredit +0,8%, Intesa +1,2%. Down Monte Paschi (-0,3%). The two brides-to-be Banca Pop. Milan (-1,6%) and Banco Popolare (-2,7%) fell together on the day in which the two managing directors met the men of the ECB's Supervision in Frankfurt to convince them to give the go-ahead for the merger. During the day, the capitalization of the bank in Piazza Meda exceeded that of the Veronese institute: 2,82 billion against 2,68.
GENERALI, HOLDS OFF THE APPOINTMENT OF DONNET
Bonds issued by European insurance companies are suffering, -0,6% since the beginning of the year under the pressure of the forthcoming fall in interest rates in the euro area. Even the shares of the sector (-12% since January) are among the most sacrificed.
On the eve of the Frankfurt meeting, however, Generali (+0,8%) is making progress. Barring last-minute hitches, the company's nomination committee will indicate the company's new CEO on Friday: Philippe Donnet, current CEO of Generali Italia, is in pole position. UnipolSai +0,2%.
FERRARI PLACES THE BOND: ASKS 5 TIMES THE BID
Ferrari +0,8%. La Rossa placed the 500 million seven-year bond in a few minutes. Faced with the requests (2,7 billion, more than 5 times the offer) the banks that handled the issue were able to lower the yield to 140 points (from the initial 160) above the mid/swap. FiatChrysler +0,5%.
Of note in the luxury sector is the exploit of Moncler (+3,6%). Astaldi closed down by 3,97% after the publication of the results and the announcement of the departure of CEO Stefano Cerri.
