Mps didn't make it, the state takes the field. The Treasury will be the first shareholder, but the decree approved overnight saves savers' money. The rescue of the Tuscan bank, now suspended on the Stock Exchange, will be followed by similar measures for the other banks in crisis which will absorb the 20 billion allocated by the decree: Popolare Vicenza, Veneto Banca, Carige and the four banks that have been in resolution for a year (Popolare dell 'Etruria, Carife, Carichieti and Banca delle Marche) Thus Italy too becomes part of the club of countries forced to intervene to rescue banks in crisis. Perhaps too late, given the damage done to the economy by the credit woes. Meanwhile, again during the night, Deutsche Bank announced that it had reached an agreement with the American authorities: the bank will pay a fine of 7,2 billion dollars, with a discount of approximately 50% on the initial request. Thus the deepest wounds in the credit map of the Old Continent are being healed. An expensive Christmas present that removes a boulder that conditioned 2016 for Piazza Affari.
BONDHOLDERS SAFE, THE SECURITY SUSPENDED TODAY
The epilogue of the crisis occurred yesterday in the middle of the night. Shortly after 21 Banca Mps announced that the last minute attempt to complete the capital increase agreed with the ECB had failed. Despite the positive outcome of the offer to convert the bonds into shares, no investor has responded to the appeal launched by the advisors JP Morgan and Mediobanca (who will not be paid9.
Having received the news, the council of ministers met at 23,35 pm and, after about an hour of meeting, approved the awaited decree-law in support of the banking system. Immediately after the approval of the provision, the bank issued a note specifying the modalities of the intervention. In summary, the MPS decree envisages a mechanism to protect 100% subordinated MPS bondholders by first assigning them shares and then ordinary bonds and recalled that public intervention triggers the forced conversion with losses. To overcome this, the same bank will activate a transaction mechanism to exchange the bonds into shares and then into ordinary bonds, thus protecting the public from the effects of burden sharing (i.e. the cut in the value of the securities to face the losses that will be borne by the public hand).
Institutional investors, on the other hand, will have a conversion that will recognize them 75% of the nominal value. Only in the coming months will it be seen how the Treasury will manage its stake in MPS and whether there will be an agreement with Brussels for the progressive disposal of the stake, perhaps after the bank has rediscovered the path to profitability and growth.
The intervention closed yet another dramatic day: the stock closed with a loss of 7% bouncing after further suspensions due to excessive downtrend. In the morning, the institute had warned that, within four months, the cash on hand would be reduced to 200 million.
CONSUMPTION DOWN, US EXCHANGES DOWN
The news arriving from the banks monopolize the attention of the markets, at least those open in anticipation of Christmas.
– Closed the Tokyo Stock Exchange, to celebrate the emperor's birthday. Reduced activity in Sydney -0,3%, sluggish Chinese Stock Exchanges: Shanghai -0,3%. Hong Kong loses 1%.
– Second day of decline for the US markets, the Dow Jones fell by 0,12% to 19,919.01, the S&P 500 index lost 0.19% Nasdaq -0,24%.
– The slowdown in the personal consumption trend was above all the slowdown in price lists: +0,2%, down from +0,4% the previous month. Family incomes have fallen for the first time in nine months. The unemployed rise to 275 (+21.000). The effect of Trump's messages is not seen for now.
– The third and final reading of US third quarter GDP has been published. In the July-September period, the US economy grew by 3,5%, from +3,2% in the second reading. The +3,5% in the third quarter is the strongest increase in recent years.
– Apple falls by 0,7% to 116 dollars, after Nokia has decided to sue the Cupertino company in Germany and the United States. The accusation is that of having violated its patents. The Finnish company claims to have contributed to many key technologies used in today's mobile devices, including Apple products. After years of negotiations to seek an agreement, he is now acting in court to defend his rights. There are 32 patents in question and they concern the display, the use of the interface and the antenna.
– The dollar weakens to 1,0435 against the euro. In parallel, Brent oil rose by 1% to 55 dollars. Among the oil companies, Chevron +0,8%.
– In Piazza Affari Eni +0,3% the Milan prosecutor ordered the notification of the investigation closure notices against 13 suspects, including the CEO Claudio Descalzi, in the context of the investigation into alleged international corruption by the Italian oil major in Nigeria in 2011. Saipem +3%.
MILAN DOWN. 2017 HOT FOR ITALIAN GOVERNMENT BONDS
A mid-service session is looming for the stock exchanges of the Old Continent already focused on Christmas. Futures signal a 0,1% higher opening for the City. The opening in Frankfurt is much more lively, which will have to metabolize the news of the agreement between Deutsche Bank (yesterday -1,36%) with the US Ministry of Justice.
– In Milan, the Ftse Mib index closed the session with a -0,49% to 19.121 points.
– Negative closure for the bond market. The Italian ten-year rate rose to 1,854% from 1,845% at the end of Wednesday's session. The spread with the similar maturity of the Bund rises in the area of 160 basis points from 157.
– The first placements of 2017 are approaching, the year in which the Treasury will be able to face a substantial amount of maturities and the unknown factor associated with extra funding to be used to secure the banks. “In the light of what was observed in the last few weeks of 2016, it is reasonable to expect that interest rates, the conformation of the yield curve and inflation will evolve significantly different from the trend that characterized the year that is about to close ”, say the introductory considerations of the Treasury's programmatic document.
– On the occasion of next Tuesday's placement, the Ministry of the Economy will make available to investors six-monthly BOTs for 6,5 billion euro, an amount to be compared with the 6,41 billion maturing on December 31st. Tonight the methods of the medium-long term offer on the 29th will be communicated.
– Some sources told Reuters that the ECB will wait for the German elections scheduled for September to make other monetary policy moves but does not rule out any options if the economy should show signs of worsening.
MEDIASET, BOILED AT 30%. STATE PLAN FOR TELECOM
The government is about to play the Cassa Depositi e Prestiti card to curb Vivendi's offensive. But the operation, according to what La Stampa writes, does not concern the Mediaset match, but Telecom Italia -1,8%. The concern of Palazzo Chigi, in fact, is linked to a possible merger between Orange and the Italian company according to the designs of Vincent Bolloré which aims, according to persistent rumors, to cede control of the former Italian incumbent to the former France Telecom. The entry of the CDP would serve to block the operation or, at least, to start a collaboration on equal terms.
Meanwhile Vivendi announced in a note that it has 28,8% of Mediaset, 29,94% of the voting rights. The last step before having to launch a company-wide Mandatory Offer. The title recorded a sharp fall -12%.
The top management of Mediaset were heard yesterday in Consob on the "climb". Today the hearing is scheduled in the offices of the Commission of Arnaud de Puyfontaine, CEO of Vivendi.
BILLIONAIRE CONTRACT FOR DANIELI. FCA BACK
in the rest of the list.
- Unicredit advances by 1,2%. For the KBW broker, the title is no longer to be sold. Banco Popolare + 3%.
– The industrialists are holding back: Fiat Chrysler -2,8%. Leonardo -0,5% StM -0,9%.
– Rising sharply Danieli +3,35%: the company signed a contract with Azerbaijan Baku Steel Company for the construction of a metallurgical complex worth over 1,3 billion dollars.
– Shop also on De Longhi +2,4%. Banca Imi confirmed the hold recommendation on the stock and the target price of 22,1 euro with concrete future growth prospects for the company. (reserved reproduction)p
