DRAGONS: INVESTMENT OR NO RECOVERY. FLY THE DOLLAR. FIAT AND TELECOM ON THE MOVE. UP THE SPREAD
Markets are betting on a partial advance by the hawks at next week's Fed meeting. The week therefore closed with a robust advance of the dollar against the yen (at a six-year high at 107,35) and against the euro (129,18 this morning in Asia) and the parallel drop in raw materials, starting with oil. Pound recovers: according to the latest polls on the Scottish referendum, unionists are back in the lead.
In Tokyo, the Nikkei index rose by 0,41%. Hong Kong -0,3% is in negative ground. Wall Street was almost flat: the Dow Jones index lost 0,12%, the S&P 500 rose by 0,09% and the Nasdaq rose by 0,12%. New European sanctions against Russian defense and energy companies enter into force today, and could be lifted following a review of the ceasefire in Ukraine later this month. In response, Russia has prepared the second package of counter-sanctions with which it could limit the import of cars.
The tensions weighed above all on the stock markets of the Old Continent: Frankfurt closed yesterday down by 0,09%, London by 0,45%, Paris by 0,22% and Madrid by 0,47%. In Piazza Affari, the FtseMib index closed the session down by 0,23% 0,23% to 21.092 points.
CRUDE STILL DOWN: NIGERIA WEIGHTS ON ENI
Continue the descent of Petroleum, with Brent at 97,4 dollars a barrel (-0,5%), the lowest since June 2012. The drop in prices is reflected in the securities of the sector (-0,5% the European Sroxx of the sector). It makes its own story Eni -1%, after the news that the managing director Claudio Descalzi is being investigated by the Milan prosecutor's office for the payment of a bribe in Nigeria. Banca Akros has estimated that "in the event of a possible settlement, the potential negative impact on Eni could be around 500 million euros or about 1% of the market capitalisation". The broker maintains the 'buy' rating on the stock.
Instead, it stood out among the Milanese blue chips Tenaris +2,9%. The world's leading pipe builder for the oil industry has been promoted by Morgan Stanley to Overweight from Equal Weight. The target price on the ADR listed in New York was raised to 60 dollars from 47 dollars. Each Adr represents two Tenaris shares, for which the target price on the share is around 23 euros.
DRAGONS: SPAIN IS THE VIRTUOUS EXAMPLE
New alarm coming from the ECB: the EU recovery has lost momentum and the Italian government will struggle to meet the 2,6% deficit/GDP forecast at the end of the year. Therefore "it is important that Italy further strengthens its fiscal policy position so as to comply with the provisions of the Stability and Growth Pact, in particular as regards the reduction of the public debt/GDP ratio".
Preceded by this warning, yesterday evening Mario Draghi spoke in Milan at the Eurofi meeting. “We are facing a series of conditions – he said – low growth and low inflation, high debt and high unemployment, which can only be addressed through concerted actions on both the supply and demand sides of the economy. ”. There will be no sustainable recovery in the absence of increased investment." After the measures taken at the beginning of September "the Governing Council of the ECB is ready to intervene further, if necessary".
But now the ball is in the governments' hands: countries with smaller budgetary margins, such as Italy (not explicitly mentioned), can support investments "by reducing the tax burden and unproductive current expenditure". At the same time, "it may be useful to open the debate on the overall orientation of fiscal policies in the euro area, with a view to increasing public investments where there is fiscal space", an implicit reference to countries such as Germany. The positive example is Spain, where investments will rise thanks to the combined effect of reforms and tax cuts.
BTP, AUCTION OK. BUT THE SPREAD RISES AGAIN
Serene morning, afternoon under stress, on the wave of new tensions arriving from Ukraine. The yield of the ten-year BTP thus closed the day at 2,46% from 2,39% the day before. The spread widened to 142 (+7 points). The winds of crisis overshadowed the happy outcome of the auction of BTPs at 3,7 and 15 years in the morning. Securities totaling 6,957 billion were placed this morning, against an offer of between 5 and 7 billion.
In detail, the rate of the 3-year BTP in May 2017 fell to 0,52% from 0,84% in the last auction, The 7-year BTP in December 2021 was placed at 1,71% (2,17% at July). Finally, the 15-year BTP in March 2030 was placed for 2 billion at a rate of 3,03% from 3,44%.
WHITE SMOKE AT THE MPS BOD, MORGAN STANLEY PROMOTES THE BIG
The comeback of the Rome-Berlin spread overshadowed the positive notes for the credit sector. Morgan Stanley reiterated its positive view on Italian banks, expressing a preference for Unicredit e Understanding both +0,16%.
Instead, it's declining Mediobanca -1,82%. More modest variations for Banco Popolare 0,08%, Bper 0,61% e bpm 0,31%. Mount Paschi –1,33%. After the pressure from the Sienese institution, Marco Turchi and Paola Demartini take a step backwards, appointed by the Foundation to the bank's board. Their renunciation serves to make room for the two new partners, Btg Pactual and Fintech.
Between insurance Generali -1,04% does not benefit from the Citigroup promotion which raised the recommendation from sell to neutral and the target price from 15,5 to 16,6 euros, as well as the forecasts on the dividend expecting a payout ratio of 45% in the coming five years and a yield of about 4% in 2014.
FIAT, FITCH REMOVE THE NEGATIVE OUTLOOK
Accelerate again Fiat rise of 1,53% to 7,96 euros; the rating agency Fitch revised the outlook from negative to stable and announced that it could increase the rating (now confirmed at BB-) to reflect the group's credit profile.
CEO Sergio Marchionne, at the presentation of the Jeep Renegade, said that the third quarter "should go well" and that at the moment he has no intention of revising the forecasts for this year. The capital increase “is something the board will decide on in October, where we will know which path we will take. If the company manages to carry out the projects it has announced, technically it doesn't need to”. The manager also explained that the Maserati Levante SUV will leave the Mirafiori plant by the end of 2015; on the European market, however, the relaunch of Alfa Romeo is indicated as "decisive".
Meanwhile, yesterday Luca di Montezemolo took part for the last time in the Ferrari board of directors dedicated to the half-year accounts: the group's revenues only rose to 1,34 billion in the first six months of the year. Profit increased by 10% to 127 million: the USA remains the first reference market, but Japan and Australia are growing.
TELECOM ON SHIELDS. ENEL, MOVES IN LATIN AMERICA
It stands out among the best titles Telecom Italy up 1,4%: the market is once again betting on the possible axis with Premium, thanks to the arrival of Vincent Bolloré.
Mediaset on the other hand, it closed up by 0,3% at 3,306 euros: Credit Suisse (outperform and target price of 5 euros on the stock) while cutting its earnings per share estimates up to 2016, predicted an acceleration of the recovery of the advertising market in Italy and Spain next year. Enel unchanged at 4,202 euros: in the meantime, the reorganization of the South American activities announced at the end of July is taking off, with Enel Energy Europe's proposed purchase of 60,62% of Enersis (the Chilean subsidiary which owns the South American activities) by Enel Energy Europe from Endesa . Double upgrade on the stock by RbC, from underperform to sector perform (with target price revised from 4,25 to 4,5 euro) and by S&P Capital IQ, which raised the rating from hold to buy (confirming the target price at 4,55 euros).
The company led by Francesco Starace was promoted by Rbc Capital which instead downgraded Terna -0,3%. A2A it fell by 2,4%.
