A sacrifice or a good deal? The response from Piazza Affari to the news, released via press release, that Intesa Sanpaolo (+2,45%) had presented an offer for a portion of the assets and liabilities of Banca Popolare di Vicenza e di Veneto was positive. Bank, price 1 euro. On the contrary, the market judged the operation as the turnaround expected for (too) long, so the positive effect was transmitted to the entire list: the Milan Stock Exchange closed euphoric beyond the threshold of 21 thousand points (+1,26 .XNUMX%), in stark contrast to the decline of the other European markets.
Why this favorable opinion? From an industrial point of view, Intesa does not appear to have any need to expand its network of branches: indeed, it would have the opposite problem. But the CEO Carlo Messina managed to defend the reasons of "his" institution: non-performing loans, performing loans and subordinated bonds are outside the perimeter, so as to guarantee "the total neutrality of the transaction with respect to the Common Equity Tier 1 and the dividend policy".
Furthermore, the bank was able to demand from the Treasury the coverage of the integration charges connected to the acquisition (see job cuts) and from Parliament "an approved and definitive legislative framework" to avoid surprises. In short, the state will pay the bill above all.
Intesa's intervention has, moreover, neutralized a potentially devastating situation: a disorderly crack would have cost the system an outlay of 9 billion. Without considering the inevitable impact on BTPs. In the end, as Intermonte commented for Intesa Sanpaolo, taking charge of the problem of Veneto Banca and Banca Popolare di Vicenza could turn out to be a good deal.
CHINA STILL ON THE RISE, ONLY TECHNOLOGY RISES IN THE USA
Prices contrasted around the world, under the pressure of oil. Positive Asian stock exchanges, thanks to the modest rebound of crude oil, yesterday falling below 45 dollars for the first time in 2017. Flat, in the final session, Tokyo: Nikkei index -0,1%. Seoul +0,4%, Mumbai +0,4%. Sydney did well (+0,8%).
China's stock markets are up this morning: Hong Kong +0,5%, Shanghai +0,8%. The positive effect of the admission of Chinese A-shares to the MSCI indices continues. The operation, which will concern 222 shares, will involve purchases on the Chinese stock exchanges for 17-18 billion next year, but it is only the tip of the iceberg of a movement that promises to be much more profound: the full integration of China into the circuit international can generate flows of 340 billion dollars, according to Reuters.
Markets at double speed yesterday in the US: the drop in crude oil, together with the statements of some Fed officials, pushed down the Dow Jones (-0,27%) and the S&P 500 (-0,06%). Instead, technology and biotech supported the Nasdaq (+0,74%).
WTI crude fell to as low as $42,17 a barrel, levels not seen since August 2016. Then, on the back of technical caps and a higher-than-expected drop in US inventories, prices rallied towards 42,7, but still remain in the low area of the last 10 months. Doubts weigh on the effective capacity of crude oil producing countries (OPEC and non-OPEC) to reduce production and achieve a better balance between supply and demand. Brent also slipped below the threshold of 45 dollars a barrel. Commodity futures lost 2017% in 21.
BIOTECHNOLOGIES ON THE SHIELD, CATERPILLAR HOLDS DOWN
On Wall Street, the oil stocks index (-1,6%) was the worst. Since the beginning of the year, the sub-fund has suffered a loss of 14,9% (against +8,9% for the S&P index). In Piazza Affari Eni rose by 0,5%, Saipem +0,1%, negative Tenaris (-0,9%). Financials were also weak (-0,8%), conditioned by the downward trend of inflation. Two Fed governors, Stanley Fischer and Eric Rosengren, argued that they see more risk in a delay in rate hikes than the other way around.
Caterpillar was also bad (-3,3%), title - thermometer of industrial activity. But Fedex, the logistics giant, rose by 1,6% after the accounts. Day of records for biotechnology. The Biotech index rose by 4,1% driven by Celgene and Regeneron (+5%), Biogen (+4,7%).
MILAN, TOP BAG. MACRON DEBUT AT THE EU SUMMIT
European stock markets down on the eve of the summit of heads of government of the Eurozone which will see the debut in Brussels of French President Emmanuel Macron today. Paris lost 0,37%, Frankfurt -0,32%, London -0,33 and Madrid -0,05%. The exception is Milan, thanks to the boom in the banking sector. Piazza Affari closed euphoric (+1,26%) and returned beyond the threshold of 21.000 points (21.071).
Fitch has raised its estimate of Italian growth in 2017 to 1,2% from the +0,9% indicated in March, after the upward revision made by Istat on the last two quarters. According to the June Global Economic Outlook report, "expected growth will remain around 1% in both 2018 and 2019".
Slight rise in closing for the Btp. The market continues to be supported by a series of factors: the perception of a lower political risk in Italy and Europe; the downward trend in inflation; the continuation of the accommodating policy of the ECB.
SPREAD DOWN STILL, BTP YIELDS AT THE LOWEST SINCE JANUARY
The Btp/Bund spread fell in the morning and then again at the close to 164 basis points, a new low since mid-January. The Italian ten-year rate fell to 1,88%, again a new low since mid-January. Yesterday, Germany placed 809 million euros in 1,02-year Bunds, with a yield down to 1,24% from the previous 30%. After the auction, the German 1,034-year yield fell to a two-month low at XNUMX%.
Also in the morning, the Portuguese Treasury placed a total of 1,25 billion in 3- and 11-month bonds, with falling rates. Rates on Greek government bonds fell during the day to their lowest since September 2014 on ten-year maturities and since the beginning of 2010 on two-year maturities. Prime Minister Tsipras said that thanks to the drop in yields, Athens should soon be able to get financed on the capital market again.
Today, with the markets closed, the first details will arrive on the round of Italian auctions at the end of the month, with the announcements on the placements of Ctz and Btpei on Tuesday 27. Intesa Sanpaolo's forecasts are for an offer of up to two billion Ctz and up to 1,5 .XNUMX of indexed.
THE BANKS WAKE UP. UBI (+5%) LEADS THE RACE
Piazza Affari was driven by the good tone of the banking sector (+2,81% the sector index). The acceptance of Intesa's operation was confirmed by the rise in the bonds of the Veneto institutes. At the end of the session, the senior of Popolare Vicenza March 2020 coupon 2,5% gained more than 3 points to 88,20, for a return in the 7,68% area; last week the yield had fallen to about 6,3%, to its lowest level since the end of January.
The other senior of the Vicenza bank with sufficient liquidity increased by around four points: in October 2018, the 5% coupon rose to the price of 92,39, for a yield of 11,39%, after a low since mid-February last week in area 8,7%. As regards Veneto Banca, the senior May 2019 coupon 4% gained just under four points at the closing price of 90,13, for a yield of 9,93%, against a low of 8,20% last week .
In addition to the Intesa operation on the Veneto banks, something is also moving on Monte Paschi. The president of the institute, Alessandro Falciai, stated that it is very probable that the entry of the State into the Sienese bank's capital as the reference shareholder will take place in July.
The uncertainty regarding Banca Carige continues (-0,19%). Yesterday the bank appointed Paolo Fiorentino as CEO. In a note released in the evening, the bank announces that it will supply the ECB, within the envisaged deadline of 23 June, with clarifications on the governance and execution of the plan for the reduction of non-performing loans (Npl), while, as regards the assessment of of capital, a time deferral will be requested in order to provide timely and weighted estimates.
The other institutions are on very positive ground: Unicredit +3,5%, Bper Banca +4,4%, Banco Bpm +2,3%, Ubi +5%. The positive turnaround affected the insurance companies: Generali +1,7%, Unipol +1,3%.
SUPERSTAR UTILITIES. TELECOM DOES NOT SEND TO THE GOVERNMENT
Positive day also for utilities. Historic overtaking of Enel (+1,8%), since yesterday the stock with the highest capitalization of Piazza Affari (50,63 billion) after overtaking Eni (49 billion). It is the confirmation of the grace season of the utilities: Terna +57%.
Snam also rose +0,8%. Analysts welcomed the news of talks with Edison to acquire 7,3% of the Rovigo regasification terminal and the methane pipeline linking the natural gas terminal to the Snam Rete Gas hub on the coast. For Equita Sim (rating hold, target price at 4,1 euro) the value of the transaction is between 150 and 200 million euro overall with a possible positive impact of around 1% on earnings per share. The possibilities of increasing the dividend could, therefore, increase, considering the company's intention to maintain a pay out ratio of around 80%.
Telecom Italia goes up (+0,36%) in open controversy with the government. The company reiterated that it does not intend to give in to government pressure to limit the development of its network in market failure areas, adding that the network is not for sale and if one had to make an assessment it could be estimated at 20-25 billion of Euro. The CEO of the telephone group, Flavio Cattaneo, said so during the hearing in the Senate in which he forcefully reaffirmed his position after the government's accusations.
The executive believes that Tim's decision to invest in those areas, after the consultation in which he said he would not intervene, could in some way be sanctioned. At stake is the profitability of Open Fiber, a company controlled by Enel at Cassa Depositi e Prestiti, which won the Infratel tender.
ORDERS FOR LEONARDO, A BUY FOR AUTOGRILL
Leonardo did very well among industrialists, closing at 15,56 euros, up 2,71%. The Italian defense group has been awarded the contract for the construction of an integrated logistics platform that will be used by NATO for the management of operational and maintenance services in Sigonella. Stm +0,8%, Fiat Chrysler +0,3%.
On the Autogrill shields on which HSBC has started coverage with a "buy" recommendation and a target price of 13,10 euros. In evidence Landi Renzo (+14%), Trevi (+10%) and Digital Bros (+5,4%).
