BUSINESS PLACE LOSES MOMENTUM AND CLOSES IN PATCH
COMPARISON OF THE EU AND THE RATING AGENCIES ON THE GREEK DEFAULT
Sell and relax. After a week of very high tension, there are not a few traders who preferred to close their positions in the last part of the session. And so, after the euphoric start to the morning, the Piazza Affari index, like the other stock exchanges on the Old Continent, fell back, settling at -0,15% with the Ftse/Mib at 19.361. Things are better at the Parisian Cac (+0,60%) or at the Frankfurt Dax (+0,39%). London's FTSE 100 closes at +0,51%.
Among the reasons that inspire prudence, there is certainly the issue of the rating agencies. Fitch has promptly communicated that it has placed Greece's sovereign debt in "restricted default". This is the first test of the solidity of the Greek bailout plan approved yesterday by the leaders of the European Union: the market has already digested the prospect of a default " restrictive” (in the language of Fitch) or “selective” (in the language of S&P's) for Greece. Negotiations with rating agencies are now in full swing: the first ones are already underway to verify the assessment they intend to give to the decisions taken yesterday by the euro area.
THE BTP/BUND CROSS RISES TO 257
THE SPREAD OF GREECE AT 1.160
The session of the bond market had a similar plot. After hitting a low of 225 basis points in the morning, thanks to the relief after the agreement reached yesterday by euro zone leaders on the second bailout package for Greece, the spread between the Italian 15-year and the German Bund has started to rise again, reaching just after 257 pm in the area of 95,66 basis points on the Tradeweb platform. On the MTS platform, the 34-year BTP trades at 5,380, down by 272 basis points and yields 284%. The spread with Spain drops to 811 (from 873 yesterday), that with Portugal goes to 200 (from 1168 yesterday). Greece is on a roller coaster: the differential with Germany drops by about 1360 basis points to 1,440 from 1,1820 yesterday evening. The euro is stable against the dollar, the exchange rate is fixed at XNUMX. The single currency strengthened against the Swiss franc to XNUMX.
JP MORGAN FORESEES CAPITAL INCREASE FOR UNICREDIT (-4,36%)
MILAN ASS. (FONSAI GROUP) SUPERSTARS ON THE STOCK EXCHANGE
After the morning's fireworks, a report by Jp Morgan helps to dampen the enthusiasm: the American broker writes that Unicredit, Société Générale and Deutsche Bank may need a capital increase. The Eurostoxx sector index slips by 0,5%, rising by 3,3% in the morning. Also in Milan the banks slow down from their maximum: Mps is doing well +1,38%, Banco Popolare is down -0,39%%. Unicredit -4,36% and Intesa Sanpaolo -2,83% are down.
The insurance companies performed well, from Generali +2,08% to Unipol +22,23%. Fonsai deserves a separate note +1,07% after the news of the resignation of the president Jonella Ligresti from the exercise of all executive powers. His brother Gioacchino Paolo also announced the same move in the subsidiary Immobiliare Lombarda. "We judge these changes positively - comment the analysts of Intermonte, maintaining the neutral rating and target price at 2,40 euros - even if in the past these powers had only been exercised in limited circumstances". Meanwhile, the subsidiary Milano Assicurazioni +12,8% is the best stock in Piazza Affari. Intermonte raises its rating to outperform from the previous underperform.
FIAT TOWARDS ANOTHER 5% OF CHRYSLER
INTERMONTE: THE MERGER IS CLOSER
Good market response to new Chrysler purchases by Fiat +2,28% . “We do not exclude – comments Intermonte in today's note – that the achievement of the third performance event could soon be announced which would allow Fiat to reach 58,5% of Chrysler and accelerate the merger hypothesis between Fiat and Chrysler. The news is positive as our estimates on Fiat do not include Chrysler's share of Canada”, conclude the analysts, maintaining the outperform recommendation with a target price of 9 euros. Fiat Industrial also did well +2,28% and the Exor holding +3,16%.
MEDIOBANCA. MORE SPACE FOR MANAGERS
EVEN BOLLORE' APPLAUDS THE NEWS
Mediobanca drops by 0,53% after having reached a rise of 1,7% to 6,7350 euros in the most positive moment for bank stocks. The board meeting of the Piazzetta Cuccia trade union pact gave the go-ahead for the reduction of the members of the nomination committee from six to five, leaving more room for independent directors. This was reported on the sidelines of the meeting by Vincent Bolloré, councilor of the institute. The matter now goes to the board of directors.
SNAM RETE GAS TELECOM ITALIA UNDER THE LENS OF EQUITA SIM
Snam Rete Gas ended up under the lens of Equita. The rethinking of many European governments regarding nuclear energy after the Fukushima tragedy has paved the way for new investments in gas and Italy has the characteristics to become a European hub. “We are raising our capex estimates to include investments for Galsi (1,5 billion euro since 2014) and investments in Alfonsine storage (500 million) – writes the broker in today's note -. We therefore obtain investments of 1,7 billion per year over the next 5 years. The greater investments will give visibility to the average 4% increase in Ebit over the next 5 years – explains Equita -, while the dividend is confirmed to grow by 4% per year”. Thanks to the impact of the two projects, the experts raised Snam's target price to 4,47 euro from 4,20 euro, confirming the hold recommendation as the stock "outperformed the market (+18% since the beginning of the year) and Terna of 11% and premium rate of 11% on the RAB in line with the premium at the end of 2010”.
Equita also raised Telecom Italia's target to hold from the previous neutral. For the second quarter of the company led by Franco Bernabè, the Milanese SIM expects revenues of 7,43 billion euros, an Ebitda of approximately 3 billion and a net profit of 560 million euros, down by approximately 7% compared to the same period last year. "However, we should be on the verge of an improvement in domestic activities because in the second half of the year we expect a better trend in terms of top line (about -3,5%) and Ebitda (-2%)". At Piazza Affari, the Telecom Italia share shows an increase of almost 3% to 0,93 euro.
The news that Treasury Secretary Timothy Geithner is planning a meeting with Fed Chairman Ben Bernanke to discuss the implications of a failure to raise the debt ceiling. The Bloomberg agency reports it, quoting an administration representative. The meeting is also attended by the president of the New York Fed, William C. Dudley. The Democrats blocked the Republican plan in the Senate to reduce the debt by 2 trillion over ten years. Majority and opposition are negotiating on President Barack Obama's proposal to raise the debt ceiling. The deadline is set for August 5800, after that date the United States would default.
Wall Street remains mixed with the Dow Jones down 0,5% while the Nasdaq is just above parity. The indices are conditioned, in addition to the news on the financial statements, by the disappointing quarterly of Caterpillar and by the profit taking on the European markets. Meanwhile, AMD, the world's second-largest maker of PC processors, jumped 10,3% after forecasting sales in the third quarter higher than analysts' estimates.
