Tokyo slows down -0,42%, the Chinese stock exchanges return to growth after five days of decline linked to new control measures on credit granted by banks. Hong Kong's Hang Seng +0,7% is at its highest since April 2011. However, the leap of Guangzhou hi-target Navigation Tech +10% stands out on Asian lists after several upward suspensions in Shanghai. The attention is justified by the fact that the company is among the main suppliers of electronic systems to the Chinese army. The market is betting that the decision to expand the maritime control zone over the Pacific will lead to an increase in military spending.
The Nasdaq +0,58% closed at 4.017,75 points, breaking, for the first time in 13 years, the threshold crossed in the year of the Internet bubble. Dow Jones Index unchanged, S&P 500 up 0,15%. The signals coming from the economy are contrasting. US consumer confidence slows unexpectedly, down to its lowest since April. But applications for new building permits reached 1,034 million in October, well above the 930 estimated by economists.
It was the highest level since June 2008. Home prices in the top 20 cities, tracked by the Case Shiller index, rose 13% year-over-year in September, in line with expectations. Today, the eve of Thanksgiving day (all markets closed) significant data will be released: October Durable goods, the Chicago FED, the Chicago PMI and the final Michigan Confidence reading. The holiday break will allow us to take stock of the situation in view of the FOMC in December.
Colorless day for the European stock exchanges, with the indices closing in contrasted territory. Paris scored -0,57%, Frankfurt -0,11% and London -0,87%, in the wake of the decline in stocks linked to raw materials (-1,88% for the European sector). Milan closed at -0,05%.
S&P: TEST ON THE LION OF TRIESTE AND “ON AFRICAN GROUPS”
Political tensions are growing, but do not disturb the markets' attention for Italian government bonds, remains "surprising", as noted by Giuseppe Sersale, analyst at Anthilia Capital partner: "At the end of the day, the declines in yields on 2/3 year maturities they amount to 7/8 basis points. Thursday's auction for 2.5 billion held back a bit the demand for 10-year bonds, which however closed at 4.05% keeping up with the bund's rally. The hunt for yield in a disinflationary context that promises very low interest rates in the long term continues to be the driver of the demand for Italian and, to a lesser extent, Spanish government bonds.
In this idyllic picture, however, the S&P effect falls. In fact, the rating agency put Generali +0,42% on negative creditwatch, "in the context of an action on various European and African insurance groups," after the update of the criteria relating to government bonds held. To give a higher rating to the respective government bonds, S&P has decided to apply a stress test related to the possibility of a government bond default, in relation to which securities are held.
Generali and its subsidiaries currently have an 'A-' rating, two notches above the Italian Republic. What if Generali fails the stress test? “We would probably limit the rating of the group to the level of our rating of Italy in foreign currency” writes the rating agency. A threat that, not surprisingly, falls close to the company's Investor day in London.
AUCTIONS 2013, 98% OF THE TARGET ALREADY COVERED
With yesterday's Ctz auction (yield down to 1,163% from 1,392% in October) the Treasury covered around 98% of the issues forecast for this year, which is not a bad thing given the incoming signal from S&P and predictable torpedoes on the eve of the bank stress tests. The auction round at the end of November continues today with the six-monthly Bot (7 billion). On the MTS gray market, the yield on the Bot expiring in May 2014 was 0,506% yesterday, against the 0,629% paid at last month's auction, close to the all-time high since the birth of the euro (0,503% set last April). Tomorrow will be the turn of the Btp 10, an amount offered of 2-2,5 billion.
MPS: WITH THE INCREASE LESS FOUNDATION
MontePaschi was the star of the day in Piazza Affari. After an initial suspension due to excessive downside (it ended up losing more than 10%), the stock closed down by 5,9% at 0,184 euro. Today the board set the terms and conditions for the 3 billion euro capital increase, which will be submitted to the extraordinary shareholders' meeting called for 27 December. The operation, says a press release, will be expected to be completed within the first quarter of 2014 and includes the reverse split of the shares in a ratio of 1 to 100. The success of the capital increase is fully guaranteed (up to 3 billion) by a consortium of banks.
The sector, in the aftermath of the meeting between the top management of the ECB and European bankers on the issue of stress tests, remains in the crosshairs. Intermonte analysts expect Bankitalia to urge Italian banks to increase loan provisions in the fourth quarter of 2013, to raise coverage of problematic loans.
For analysts, the bank at greatest risk of capital strengthening is Banco Popolare +2%. The institution led by Pierfrancesco Saviotti +2% announced after the closing the merger with the subsidiary Credito Bergamasco +2%.
Negative closures for Popolare Emilia -0,8% and Ubi -0,6%. Banca Popolare Milano – 2,60%. The electoral campaign is in full swing. Down also Bper (-0,85%), Ubi (-0,66%). Positive Unicredit +0,19% and Intesa Sanpaolo +1,04%. Only with growth, generating profitability, and with the increase in stock market capitalization, will Intesa Sanpaolo be able to maintain its independence'. It is one of the passages of the intervention of the managing director of the bank, Carlo Messina, in front of the audience of the thousand executives of the institute gathered at the Lingotto in Turin. Messina warned managers that 'with a view to a return to GDP growth in Italy, some large international banks may begin to look at Intesa Sanpaolo as possible prey'
ARRIVES MONCLER. SWEET CHINA FOR FERRAGAMO, BITTER FOR HUGO BOSS
Green light for the Moncler IPO. The range of shares to be placed was set between 8,75 and 10,20 euros. Salvatore Ferragamo closes sharply (+1,96%), which has gained 14% since the publication of the accounts last November 22th. Geox's boom continues +8,12%. Only Luxottica loses ground -0,8% after Berenberg's downgrading to "hold" from "buy".
Fly to Wall Street Tiffany's which gains more than 7% after publishing excellent quarterly results which allowed the company to revise its annual guidance upwards. Conversely, the slowdown in the Chinese market plays a bad joke on other brands Remy Cointreau loses 7.3% in Paris after having revised downwards its 2013 estimates and forecasts for the Chinese New Year. Pernod Ricard -1,8% and Campari -0,6% also fell. Down, again due to the slowdown in the Chinese market, Hugo Boss -3,8%.
TELECOM ITALIA, THE LAW ON THE TAKEOVER OFFER IS REMOVED
The mixed performance of the Milanese stock market involved all sectors. Negative Fiat -1%, still penalized by the postponement of the Chrysler IPO to 2014. Telecom Italia closed with a loss of 1,6% while the speculative appeal on the stock is starting to fade in view of the December 20 shareholders' meeting: a pre-survey among foreign funds indicates that at the moment there aren't the numbers to hypothesize that the motion to revoke the board of directors could pass the assembly. Furthermore, the Deputy Minister of the Economy, Stefano Fassina, explained that the reform of the takeover bid will be the subject of a subsequent measure and not in the maxi-amendment presented in the Chamber. Eni is also down, down by 0,9%. Saipem +1,2%, Tenaris -2,4%.
Finmeccanica closed in positive territory +0,09%, which placed 7-year bonds on the market. At the start of the day, shares discounted the news that the Indian government had rejected AgustaWestland's request for arbitration, after the cancellation of the order for the supply of 12 helicopters. The president James Pallotta and the representatives of Unicredit, the second shareholder of Neep, the holding that controls 78% of As Roma -7,09% after giving up the top spot, were heard this morning by Consob, after the exchange of press releases occurred in recent days regarding contacts made by the bank with a possible Chinese investor.
