THE ELECTION IS GOOD FOR TOKYO +1,8%. TELECOM ITALIA DUEL ON SAWIRIS
The Stock Exchanges are slowing down, grappling with old and new problems: the Israeli attack on Gaza contributes to the heavy downturn on Wall Street. The price of Wti crude oil rose by 1,2% to 86,4 dollars a barrel, Brent to 110,1 dollars (+1,7%).
In reverse the Tokyo Stock Exchange +1,8% takes off after the decision of the ruling party, the LDP, to bring forward the elections (scheduled for the summer) to next December 16th. In this way, the prime minister wants to avoid the risk of a parliamentary impasse on the "fiscal cliff" and the new budget. An example not to be overlooked, given the singular political similarity between Japan and Italy…
Conversely, the other Asian Stock Exchanges fell, starting with Hong Kong -0,9%. Heavy decline of Wall Street, which judges far an agreement on the fiscal cliff: At the end of the sessiona the Dow Jones falls by 1,45%, S&P -1,39%, Nasdaq -1,29%.
In short, a heavy mortgage on this morning's opening. The Milan Stock Exchange ended yesterday down by 0,5%: the seventh session down in the last nine Frankfurt and Paris lost 0,9%, London fell 1,1%.
ASIA
The Party Congress ended without surprises. The new central committee, made up of 7 members, however stands out for the prevalence of the conservatives while the reformists Li Yuanchao, head of the party organization and Wang Yang, the party secretary of the Guangdong province, were not promoted.
The reaction of the Shanghai Stock Exchange is cautious -0,4%. The market, down by 6,8% this year, is now carefully watching the first moves of the new executive. One of the most urgent problems for Xi Jingping, the new president, is the deterioration of the assets of the large public banks, the engine of the economy: bad debts have increased by 22,4 billion yuan in the last three months. A cleaning operation is urgently needed.
AMERICA
A new wave of bond purchases by the Fed is in sight. This is what can be deduced from reading the minutes of the Fed meeting of last October 23-24, on the eve of the elections. The operation could be launched in December, with an explicit objective: to accelerate employment growth.
Meanwhile Barack Obama, in his first press conference since June, he declared willing to compromise with the Republicans to avoid the fiscal cliff, but he reiterated his tax strategy for the second term: the legislation "can be simplified and made more efficient", but a review and possible reduction of tax deductions "is not sufficient" to increase tax revenues enough. Therefore "it is necessary that the richer Americans pay more”. Tax cuts for citizens with incomes over $250.000 will not be extended. But Obama added: "I will not close the door on anyone, I want to hear new ideas, the problem can be solved." The macroeconomic data released in the United States did not shift the center of gravity of the session and the quarterly good of Cisco it was not enough to shake up Wall Street.
The leap of Abercrombie & Fitch +26%. The casualwear company released better-than-expected quarterly earnings per share of $0,87 versus consensus expectations of $0,59. Revenue climbed 9% to $1,17 billion. In the end, Warren Buffett announced Berkshire Hathaway's investment in John Deere.
EUROPA
Charles Dallara, number one of the IIF (the body brings together the main 400 European banks), surprisingly issued a warning against austerity programs that are depressing the Greek economy. 'It is time to recognize that these measures condemn not only Athens but the whole of Europe to a period which promises to be painful,' he said. Dallara, which is negotiating together with the Troika the granting of new aid to Athens, has launched an appeal to the IMF and the European Union to find "creative" and "non-conformist" solutions to revitalize the Greek economy and ensure the stability of the financial system world.
The hesitation of international investors to return to peripheral bonds with greater serenity is photographed by the outcome of the German auction of 2-year government bonds (Schatz). Germany has placed the beauty of 4,32 billion bonds at a yield below "zero" (-0,02% to be exact), for the first time since last July. Market requests amounted to 8,4 billion.
However, the Greece/Germany spread slips below 1.600 bps, remaining at the lowest level for the year. The euro appreciated slightly against the dollar to 1,273 from 1,270. The Euro/Swiss franc slips today to 1,2037, new low since mid-September and ever closer to the threshold (1,20) which would again force the Swiss central bank to "print" francs to avoid excessive revaluation.
ITALY
The happy note is the excellent result of the delicate Btp auction. The Treasury has placed about 5 billion bonds with maturities between 2015, 2023 and 2029 with declining yields and lower than those traded on the secondary market. The Bund/Btp spread closed unchanged at 360, the yield on the 10-year BTP stood at 4,94%.
Piazza Affari suffered from the decline of the banks: Unicredit -2,2%. Intesa Sanpaolo -1,7% Banco Popolare -2,8% Banca Popolare dell'Emilia Romagna -3,1% MontePaschi -5,1%. Among the insurance Generali closed unchanged, Unipol fell by 1,9%, Fondiaria Leaves it lost 3,4%. “Fonsai's stake in Generali will be sold within the year, that in Mediobanca by the end of 2013” said CEO Carlo Cimbri in a conference call with analysts.
Yesterday, in Europe, the media sector index shone thanks to the performance of Vivendi +5%, the conglomerate with activities ranging from telephony to television. A result that makes the landslide even more bitter Mediaset, which finished down 2,9%. Yesterday the company presented the data for the quarter and communicated that the market scenario remains difficult.
But the restructuring of Vivendi involves Italy for another reason: Tim Brasil, the affiliate dTelecom Italia +0,97% is among the companies most interested in buying the Brazilian Gvt, put up for sale by Vivendi. But new capital is needed to finance the operation. Hence the interest of President Franco Bernabé in the offer of Naguib Sawiris, ready to participate in a capital increase of 4-5 billion. But also the hostility of Telefonica which has already made it known that it does not want to sell or dilute its stake. Even for CEO Marco Patuano, a capital increase is not necessary.
The rise in oil did not support the stocks of the sector, which instead ended up lower: Eni lost 0,5% and Saipem the 2,8%. Fiat ended up down 2,5%, Pirelli it lost 2,3%. Among the industrialists, it did well StM which gained 1,5%, Ansaldo rose by 0,8%. positive Enel, up 2,1% following the presentation of better-than-expected quarterly data. Leap dthe A2A it is highlighted that it gained 4%.
Postponement of the approval of the industrial plan of Iren +1,16%, almost certainly after November 19, the deadline set for binding offers for 80% of Trm, the company that owns a maxi waste-to-energy plant under construction on the outskirts of Turin. The multi-utility is in the running together with A2A for the acquisition (both have presented non-binding expressions of interest) but today's board of directors has not made a definitive decision, since a complete picture is still missing on the prospects and numbers of the plant The municipality of Turin.
Among small caps, it has risen Bank Ifis +2,9%. Two offers arriving at the board of Cleansing +2,7% for the Santa Giulia area. One was presented by Idea Fimit (De Agostini group), the other by Manfredi Catella on behalf of Hines.
