DRAGHI'S "SERVICE BAZOOKA" WARMS THE BAGS
WALL STREET IN FLIGHT THANKS TO BRICK (AND FED)
Part "the bazooka from the back door" served by Mario Draghi . Today, in fact, banks will be able to access the ECB's three-year maxi-loan called Ltro (Longer Term Refinancing Operations) by the ECB against guarantees represented by collateral (government and securitized bonds). In this way, the bank intends to provide the system with the means to deal with the bond issues maturing in 2012 (800 billion). In June 2009, in the midst of the Lehman crisis, the ECB placed 442 billion issues a year, but this time the demand could be even higher, judging by the mood of the market. This time the ECB can offer up to 400 billion, with the goal for the whole of 2012 of reaching up to a trillion. The second auction will be held on February 29th.
A good general, said Napoleon, must be lucky. The positive data that preceded the key day for the Draghi plan suggests that the president of the ECB has good luck on his side. First of all, the successful outcome of the Spanish auction demonstrates that the unlimited liquidity therapy is beginning to bear fruit: the Iberian Treasury has placed 3,718 billion euros of quarterly bonds at a yield of 1,735% (against 5,11%) of the previous auction. Surprisingly, confidence in Germany is also improving.
Given the premises, the recovery of European lists is not surprising. The FtseMib index of Business Square closed up 2,8%, Paris rose 2,5%, Frankfurt +3,1%. London gained 0,9%. The euro rose to 1,3114 against the dollar, after falling to 1,299 yesterday. In short, the situation is almost under control. However, the Italian fever is still high, even if the government bond market shows signs of improvement. The yield of the 10-year BTP falls by 33 basis points to 6,48%, the spread is 453 basis points, down by 33 points, in any case very far from the Madrid results.
LESS CAPITAL, US BANKS BOOM. But the real propellant of Bull comes from Wall Street which experienced a roaring day yesterday: Dow Jones +2,87%, Standard & Poor's +2,98%, Nasdaq +3,19%. Two factors pushed the price lists: 1) the surprising data from the real estate market: 685 new construction sites, 9,3% more than in October, accompanied by the jump in building permits issued to 681 (+5,7% since October). 2) The Fed's decision not to ask for higher capital requirements from the banking system, contrary to what was feared on the eve. In an era of "economic stress" a Tier 1 equal to 5% will suffice for systemic banks, to be increased to 7% in a "normal era" or 9,5% for institutions with the greatest exposure to risk. The Fed's announcement boosted JP Morgan +4,9%, Morgan Stanley +3,8% and other major financial stocks. Even in this case, however, US and European policies diverge profoundly: Big bazookas in New York, coordinated but quantitatively limited interventions in the EU; anti-cyclical solutions for the capital of banks in the USA, pro-cyclical (and recessive) choices for the banks of the Old Continent.
WEATHERBAG. THE GOOD WEATHER HOLDS. The picture of the mini rally is completed by the increases in Asian stock exchanges (Nikkei 225 +1,28%, Hong Kong's Hang Seng +1,60%) favored not only by US data but also by Chinese export subsidies announced by Wen Jiabao that the stock market intervention plan decided in Taiwan (+4,2% index). In recent weeks the most effervescent sessions have rarely given an encore. This time, however, there are not a few ingredients that allow us to predict the very late start of the traditional Christmas rally. But the uncertainty of the rating agencies remains to curb the wildest animal spirits.
INTESA, BEST BANK STOCK IN THE THREE MONTHS
BPM, BONOMI HAS ALREADY RISE BEYOND 9%
Among the banks, Understanding gained 5,8%, despite Cheuvreux's decision to remove the stock from the list of favorite banks in Europe and downgrade the rating to "underperform". The analysts of the French broker have lowered their estimates by about 7% due to the worsening of the Italian economic situation. Furthermore, in support of their decision to downgrade Intesa, they cite the stock's recent performance: in the last three months Intesa Sanpaolo has achieved a 23% increase which makes it the best bank stock in the Eurostoxx Banks index (33 components). In the same period the index lost 1,1%.
Unibelievet (+6,3%) is preparing to expand the consortium of banks which will guarantee the successful outcome of the 7,5 billion euro capital increase. The total membership of the consortium is expected to rise to 26 institutes. The reorganization envisaged by the business plan is also coming to life. The division that offers financing to public bodies will be closed. The restructuring of the investment banking business is also taking shape. Edoardo Spezzotti, former head of the group's Asia and Americas area, leaves the group.
Great exploit of PopMilan +6,7% to 0,3116 euro after the final results of the capital increase: 94% of subscriptions exceeded. After the purchases of Investindustrial which has already increased its stake to 9,06%, the guarantee consortium is left with only 2,7% of the unopted shares, an easy share to place. The next obstacle will be the meeting of bondholders on the agenda tomorrow which will have to decide to modify the conditions of the 2009-2013 convertible bond with the reduction of the conversion price from 6 euros to 2,71 euros. In this regard, Federconsumatori has already announced that it will resort to a class action against the bank.
IMPREGILO, FONDIARIA, EDISON, HIGH VOLTAGE TRIS
Salini Costruzioni brought its stake to just under 15% from the current 10%. Impregile it (+4,90%). The roundup of shares by the Roman manufacturer accelerates just when Fondiaria Sai is preparing to say yes to the offer received from Gavio on the stake held in Igli, the financial company that controls 29,9% of Impregilo. Igli's third shareholder, the Atlantia group, on the other hand, intends to reject the offer which values Impregilo at 3,6 euros per share. In short, there are the conditions for a pitched battle. Atlantia could enforce its pre-emption rights by acquiring half of the share in Fondiaria Sai as provided for in the agreements. Then an alliance with Salini could take place which would put Gavio out of the game since, due to the restrictions imposed by the syndicate agreement, he cannot rake in shares without being forced to launch the takeover bid.
Today will be held the meeting between the CEO of Fondiaria Sai Emanuele Erbetta and Isvap. Topic under discussion: the criteria for increasing the solvency margin. The meeting between the advisor Goldman Sachs and the company's independent directors will also be held today in view of Friday's board meeting. The first results of the survey of the US bank would have revealed a need for new capital of around 700 million, more than suggested by Mediobanca.
Board of fire today in the house Edison. On the agenda is the analysis of the group's financial situation. The French of Edf could force the hand and propose a capital increase of 1/1,5 billion, a hypothesis that would certainly be rejected by the Italian shareholders. On the reorganization front, the hypothesis of an all-Italian Edipower ('lodo Zuccoli') is taking shape again, with Delmi who could propose to exchange his 30% stake in Edison with 50% of Edipower. In the meantime, the risk is decision-making paralysis which would have only one consequence: the relegation of Foro Buonaparte's debt to the junk bond group. There is no air of euphoria even in the other utilities, starting with Enel +0,2%. The stock suffers from the situation in Spain where it controls Endesa. In fact, the new government has declared that the next budget will be more focused on cuts than on tax increases. The market fears a cut in incentives for renewable energy, a sector in which Endesa has a strong presence.
In Europe, the best sector was the automotive sector (Stoxx +5%), with Fiat great protagonist up 7%. Last night, speaking to Fiat executives at the Lingotto, Sergio Marchionne confirmed that Chrysler's operating profits amount to 2 billion dollars. In the meantime, the group has decided that the new Giulietta Station Wagon will be produced in Cassino. Also in evidence was Fiat Industrial after its subsidiary CNH, the world's second largest operator in tractors and agricultural machinery, announced an offer for 100% of Kverneland, a Norwegian manufacturer of agricultural machinery. The offer, to be deposited by 23 December, is for 9,5 crowns per share, equal to a total of 190 million euro. On 16 December, Kverneland had received an offer at 8,5 kroner from Japan's Kubota. The Chinese Chery is also ready to take the field.
Mediaset it recovered after the recent declines with a gain of 5,9%. Finmeccanica did well +4,4% and Prysmian +6%.
Among the mid caps, they are making good gains Rcs + 4,3% Maire Tecnimont +5,6% and Indesit + 3,7% Trevi + 5% Piaggio + 8%.
