FCA continues to fly, Peugeot loses its shots. After the official confirmation of the exclusive negotiations to create the fourth global car group thanks to "a full aggregation of the respective businesses through an equal merger of 50 and 50" FCA achieved an increase of 8,22%, not at all held back by the leaks that emerged with the cleaning operation on Alfa Romeo and Maserati. Peugeot, on the other hand, fell back by 12,6%. The reaction can be explained in several ways.
A 35% BONUS FOR LINGOTTO MEMBERS
– Prior to the closing of the transaction, FCA will distribute to its shareholders a special dividend of 5,5 billion euros, as well as the stake in Comau. FCA shareholders, starting with Exor, thus receive a premium of around 35% on the closing prices on the eve.
– Peugeot's market value on Tuesday, before news of the latest talks leaked, was just over 22 billion euros. Subtracting the 46% stake it holds in parts maker Faurecia, which Peugeot is distributing to shareholders, the company will contribute capital of around 20 billion euros.
. The value of FCA is lower: approximately 18 billion, however the 5,5 billion to be paid to shareholders must be subtracted. In short, in order to land in the USA with a strong brand like Jeep (i budget data confirmed the success of the SUV especially on the American market where the group closed the quarter with an EBITDA exceeding 2 billion), Peugeot agreed to pay a heavy premium. Credit to John Elkann financially. As regards employment and industrial prospects for Italy, we will have to wait.
DUTIES: BEIJING HOLDS OFF, TRUMP IS NOW IN A HURRY
The FCA/Renault case also illuminated the price lists yesterday, which moved little after the expected drop in US rates. However, the most important news came this morning from China: the PMI index on the expectations of purchasing managers of Chinese manufacturing companies, elaborated by Caixin, rose for the third consecutive month, on the highs of the last two and a half years, to 51,7 .51,4 from XNUMX in September. The data is surprising, since yesterday, a similar survey, conducted by the central statistics office in Beijing, had given the opposite result.
The CSI 300 index of the Shanghai and Shenzen stock exchanges gained 1,3% and Hong Kong's Hang Seng 0,5%.
ITHE SUPERYEN PUT TOKYO IN CRISIS
The Japanese Stock Exchange falls. The meeting of the central bank ended with nothing done but with the indication that the Boj is ready to intervene again on the cost of money already well below zero.
The yen against the dollar, at 108. Japan's financial markets are closed on Monday for holidays.
The yuan also strengthened to 7,04 against the dollar. In Beijing, according to the latest news, there is very little desire to go ahead with the negotiations with the United States, at the moment the desire to sign only the partial contract currently being drafted prevails. There would be no intention of restarting, at the end of this partial agreement, with a negotiation on the most important issues, those concerning the most advanced technologies, 5G telephony and the rest.
THE SHADOW OF IMPEACHMENT ON WALL STREET
Donald Trump, however, flaunts optimism, also to counter the effects of domestic politics. For the third time in US history, a president will face impeachment proceedings. But Congress had never split so sharply: all but two Democrats against the president, all Republicans blocking the indictment. The escalation of the conflict suggests that politics will play an ever more decisive role in the dynamics of the financial markets as the US elections approach. Hence the need to support the market rally, precious for his re-election, with the tariff agreement. "We are at a good point - he tweeted - we agree on 60% of the problems". But to respect the date of November 16, already set for the summit of the two Big Ones, it will be necessary to choose another city: Santiago de Chile, shocked by the protests, has given up.
THE MARKETS ARCHIVE A RECORD OCTOBER
But the markets pay little attention to the turmoil affecting the key cities of global finance: The MSCI Acwi Index (acronym for All Country World Index) closed the month of October at its highest level since February 2018 with a partial gain that is almost +3%. Since the beginning of the year, it has gained 17,5% in US dollars, the closing performance improves to +21% taking into account the Euro/Dollar exchange effect.
US BAGS CELEBRATE WITH KETCHUP
- Beijing's doubts over the trade deal gave Wall Street an opportunity to breathe after record rain and rate cut: Dow Jones -0,52%, S&P 500 -0,30%, Nasdaq -0,14 %.
- Apple +2.26% confirmed the progress that had already emerged in the aftermarket on Wednesday.
- Same script for Facebook + 1,81% supported by the growth of advertising profits.
- Kraft Heinz took off +13,44%. The ketchup giant has announced that, thanks to the growth in profits, it will exponentially increase investments in marketing.
BRENT SLIPS BELOW 60 DOLLARS, TENARIS FINISHES KO
- On the eve of the announcement of the offer on the Stock Exchange of Aramco shares, Shell accounts disappoint -3,5% under the downward pressure of oil prices. Brent fell below 60 dollars and trades at 59,38 dollars a barrel, -1,43%.
- In Piazza Affari, Tenaris falls -3,29%, after the numbers for the quarter: Ebitda down by 18% year on year, slightly below consensus expectations. Revenues down 7% to $1,76 billion. The last three months of 2019 will not be so different from the third quarter, there should be an improvement in 2020. Saipem -1,26% and Eni -0,93% are also bad.
LEADING BUSINESS PLACE THANKS TO LINGOTTO
Thanks to the effect, FCA Milano +0,21% closed the last session of October at the top of the European lists at 22.639 points. In Paris, on the other hand, the Peugeot landslide caused the index to drop by 0,62%.
The other markets were weak: Frankfurt lost 0,34%; Madrid -0,36%. London was also in the red - 1,12% on what, according to Boris Johnson's intentions, should have been the day of Brexit. “This parliament will never approve Brexit, there are too many people who are fundamentally against it, who want to block it,” he said. "We have an agreement ready, let's implement it immediately after the elections on Friday 12 December and be done with it."
LAGARDE CONFIRMS THE TEAM OF DRAGONS
From today, Friday 1 November, Christine Lagarde is at the helm of the European Central Bank. The new president has decided to confirm the main consultants appointed by Mario Draghi, including her private adviser, the German Roland Straub.
European government bond yields closed sharply down after the Fed's decisions. In closing, the spread stood at 134 basis points from 135.
The 0,93-year rate is at 1%, after closing at XNUMX% the previous session.
A rain of offers to the Treasury from operators for the reopening of the last auction. €2,204 billion of the 5-year bond was requested against the €375 million offered, €2,521 billion for the 450-year bond (against the €211,8 million offered) and €112,5 million against the €2025 million made available for the CctEu in April XNUMX.
UTILITIES ALSO RUN: A2A +2,7%
In addition to the stocks of the Agnelli team, Exor +5,69% shone on the Piazza Affari stock exchange A2A +2,71% : Banca Akros raised its rating from neutral to buy and the target price to 2 euros from 1,7 euros . The drop in interest rates has also revived interest in other utilities: Enel +0,7% and Hera reach multi-year highs. Irene +0,8%.
Atlantia +0,8% like Sias. The Italian motorway concessionaires denounce the risk of blocking investments and possible disputes over the introduction of a law which would limit the tax depreciation of their investments to 1% per annum.
The banking sector is lagging behind: Intesa -0,11%, Unicredit -1,1%. Bper bank +0,45%. Banca Ifis +4% recovers after the slide on the eve.
RECORD ACCOUNTS FOR BANCA GENERALI
In managed Banca Generali positive +0,5% that presented the accounts reaching the highest levels since February 2018. Net income increased by 46,1% to 63,2 million. The growth in the intermediation margin (135,7 million, +25,1%) contributed to the result. Instead, brake Azimuth -1,8%.
Amplifon also corrects -2,9% after the increase on the eve of the results, which led Kepler Cheuvreux to revise the target price upwards to 22 from 20,6 euros.
