The agreement between Greece's creditors, i.e. the European Union, the ECB and the IMF, with the Athens government will have to be reached before the markets open next Monday, June 29, on the eve of the expiry of the 1,6 billion loan which Athens will have to repay to the IMF. After many postponements and gray smoke, therefore, everything will be decided in tomorrow's Eurogroup, which will be followed, if there is an agreement, by the vote of the Greek Parliament by Sunday and that of the German Bundestag on Monday morning.
The markets, stressed by the constant push and pull of the Brussels duelists, are watching. But even the most optimistic must seriously consider the risk of default. As the IMF spokesman, Gerry Rice, reiterated, "Greece will be declared immediately insolvent against the International Monetary Fund if on June 30 it does not pay the portion of the approximately 1,6 billion dollar loan owed to the Institute".
The Asian lists close the week with a slowdown. The Tokyo Stock Exchange falls by about half a point, despite comforting data from consumption. Another thrilling descent for Chinese price lists (Shanghai -5%) in the throes of extreme volatility.
Weak Wall Street, under pressure from the news coming from Brussels: Dow Jones -0,4%, S&P 500 -0,3%, Nasdaq -0,2%. Under normal conditions, the brilliant trend in domestic consumption reported yesterday would have caused an increase in expectations for the rate hike and the rise in the dollar. But the alert on the Greek front sustained the quotations of the euro, stable at around 1,12 against the US currency: the risk of default causes outflows from loans in euro, increasing the demand for the common currency to close contracts.
MILAN + 0,8%, THE ONLY PLACE ON THE RISE
Uphill start, cold shower around noon. Then a rain of contradictory news and rumors until the closing. Here is, in summary, yesterday's chronicle of European price lists, which showed surprising stability in the face of developments in the Greek drama (now a soap opera). The Milan Stock Exchange, the best stock exchange in Europe, closed with a gain of 0,8%. The fluctuations in Frankfurt (+0,02%), Paris (-0,07%) and Madrid (-0,12%) were much more contained. London closed at -0,54%.
GOLDMAN SACHS: SPREAD TO 400 IN THE EVENT OF GREXIT
Grexit's sword of Damocles hangs over the performance of debt securities. According to Goldman Sachs, the spread between BTPs and Bunds could fall to 100 basis points in the event of an agreement between Greece and international creditors, but rise to 200-250 basis points in the event of the introduction of capital controls by the Greek Government. And at 350-400 basis points in the event of Athens leaving the euro.
HOLDS THE BTP. THE TREASURE: NEW DERIVATIVES ONLY TO COVER THE EXCHANGE
Meanwhile, the BTP holds. After reaching a peak of 2,18% in the middle of the session, the 2,13-year bond returned to 136% on the previous day, while the spread with the Bund, which had already risen to 125 basis points in the morning, closed at 1 points. In this context, the end-of-the-month auctions got underway. Yesterday the Treasury placed 10 billion, the full amount offered, of 30-year and XNUMX-year inflation-indexed BTPEIs.
The auction prices of medium-long term bonds on Tuesday 30 June have been announced: they will be offered from 5 to 7 billion Ccteu, 5 and 10-year BTPs. Meanwhile, it was announced that during the third quarter, a new CTZ with an August 2017 expiration, and two new BTPs, one with seven years (expiring in September 2022) and a ten-year (December 2025) will be issued.
After a thousand controversies, the strategy of the Treasury on derivatives changes. In the future, positions will be taken only to hedge against exchange rate risk in the event of issues in currencies other than the euro. The announcement came during the parliamentary hearing of the director general of the Treasury Vincenzo La Via, who justified the choice with the changed market context
US FUNDS, AFTER THE END OF THE LOCK UP, HEAD TO ENDESA
A piece of news relaunched yesterday evening by Reuters could shock Enel (+1,1% in yesterday's session). According to the agency, some funds, including CVC and KKR, are studying an offer for a "significant" stake in Endesa, Enel's Spanish subsidiary, according to sources familiar with the dossier. Interest was ignited in May when the six-month lock-up triggered at the time of the placement of 22% of the Spanish company expired, now controlled by the Italian group (which has no intention of going down) for 70%.
Yesterday Enel Green Power also rose (+1,7%), supported by the promotion of Exane to Outperform. On the other hand, oil stocks were weak: Saipem -1,56% after a negative report from Ubs. Eni -0,12%.
FLY BPM. MORGAN STANLEY BETS ON UNICREDIT
The positive performance of the Italian market is linked to the lively performance of the banking sector. There are various reasons for the increase. Banca Popolare di Milano leads the race (+2,39%). During the session, it recorded a new high since November 1,0390 at 2010 euro. The rally is linked to the purchase, completed yesterday, by Poste of the 10,3% held by Monte Paschi (+1,25%) in Anima Holding (+0,61%): Banca di piazza Meda has undertaken to sell the quota exceeding the 12% threshold within 25 months.
Second move Toro: yesterday the agreement was signed between Kkr, Intesa and Unicredit which gives life to a company for the management of credits of companies in restructuring. Intesa rises by 1,8% Unicredit +1,6%. According to the Morgan Stanley experts, betting on the bank led by Federico Ghizoni is the best way to gamble on improving the quality of assets in the Italian banking sector.
American analysts are convinced that provisions to cover non-performing loans will remain high in the short term, but that structural reforms, such as reducing the tax deductibility times for credit losses to 1 year, could generate positive surprises in the medium term.
Banco Popolare also did well (+2,07%) and B. Pop. Emilia (+2,8%). Finally, Carige's capital increase was a complete success: 99,8% of the capital was subscribed. At the end of the operation, the Malacalza family controls approximately 17%, Volpi 5%.
In the insurance sector, Generali +0,1%. The Bank of Italy announced yesterday that it has completed the sale of the 4,48% stake held in Generali.
INFRASTRUCTURE, BOOM IN INTERNATIONAL ORDERS
A day to remember for the great works. Astaldi (+3,5%) obtained a maxi-financing from the Turkish health ministry for the construction and management of one of the largest medical centers in the world.
Maire Tecnimont gains 3,7% after Nomura's promotion to Buy. The target price was more than doubled to 3,90 euro from the previous 1,68 euro. Last week, the company announced that it was awarded, in partnership with other companies, an order for the construction of a new production area in a refinery located on the outskirts of Moscow. The value of the contract pertaining to Tecnimont, on a multi-currency basis, amounts to approximately 480 million euro.
Salini Impregilo (+1,74%) turned to its highest level since mid-April, at 4,2080 euro, after a closed-market upgrade of its long-term credit rating by Standard & Poor's, which took it from BB to BB+ .
FCA BRAKES, BOILING DOES NOT HEAT TELECOM
Telecom Italia closed unchanged at 1,17 euros, without reacting to it landing in the capital of Vivendi. Closing at a loss for Fiat Chrysler (-1,22%). Pirelli -0,46%, to 15,29 euros. The Fininvest team is brilliant: Mediaset +2,61%, Mondadori +1,6%.
