Financial missiles are flying in the skies of Moscow. The titles of boyars close to President Putin pay a heavy price for American sanctions. But Russia, a great military power, has a small weight on an economic level, certainly secondary compared to the two heavyweights, China and the USA.
This time it was President Xi Jingping who gave the boost to the markets. Beijing's number one, in a speech at the Boao summit dedicated to celebrating the anniversary of the economic turnaround of Deng Xiaoping, the starting point of China's formidable rise, announced new openings of the internal market, including the removal of tariffs on auto imports, lowering limits on foreign investment in China, plus aligning the Chinese system with international trade and financial norms.
Beijing's move, which partially neutralizes fears of a possible competitive devaluation of the yuan, has electrified Asian stock markets and commodities.
Tokyo advanced by 1,1% driven by car stocks: Toyota +1,9%, Honda +2,1%. Chinese lists (+0,7%), Hong Kong (+1,1%) and South Korea (+0,2%) are also on the rise.
Raw materials also rose following Xi's lead. Brent oil is trading at $69 a barrel, up 0,5%, gaining more than 2% yesterday. Eni rises +0,7% in Piazza Affari. Saipem down -2% after Consob's objections to the 2016 capital increase.
The session on Wall Street was much more troubled. The market closed higher but most of the gains accumulated during the session have vanished in the last hour: Dow Jones +0,2%, S&P500 +0,3%, Nasdaq +0,5%.
The news of the search of the studio of Michael Cohen, Donald Trump's personal lawyer involved in the confidentiality agreement with the porn star Stormy Daniels, slowed down the race in price lists (in any case Apple and the pharma sector were in evidence). The search of Cohen's offices was triggered on the instructions of special prosecutor Robert Mueller, the superpoliceman leading the Russiagate investigation. The Washington Post reported tonight that Cohen would be under investigation for bank fraud and campaign finance violations.
Among the key events of the day was the testimony/trial of Mark Zuckerberg in Congress. Yesterday, the creator of Facebook (+0,46%) began his testimony before some deputies behind closed doors. Today there will be the scene of public repentance for "having seriously underestimated" the risks of privacy violation. In addition, of course, to the measures that Zuckerberg intends to take to protect users. Starting with the suspension of CubeQ, emulating Cambridge Analityca, also active in Milan.
MILAN AND MADRID LEAD EUROPE
Cautious start to the European financial week, despite the boost coming from the turnaround in Deutsche Bank. For now, after all, the performance of the Stock Exchanges certainly does not disturb bankers' sleep: "The risks materialized in the global stock markets at the beginning of 2018, for now they have not had significant repercussions on the credit market and therefore on the conditions general finances". So yesterday Mario Draghi on the occasion of the presentation of the annual balance sheet of the ECB.
Milan +0,54%, at 23.054 (record since February) shares the day's record in the eurozone with Madrid +0,6%.
The other eurozone price lists are slightly above parity, also held back by the strengthening of the euro/dollar above 1,23. Paris +0,10 pays auto sales: Renault down 2,5%, Peugeot -1,1%.
Frankfurt +0,17%: a positive report by UBS instead allowed Lufthansa to rise by 1,2% on the day of the announcement of a strike called tomorrow by the Green unions in the airports of Frankfurt, Munich, Cologne and Bremen with the cancellation of around 800 flights.
Weak Zurich (+0,19%). Novartis of Switzerland has reached an agreement to buy AveXis in an 8,7 billion dollar cash transaction, strengthening itself in gene therapy and enriching the portfolio with a treatment for a rare disease.
London +0,10%. Heavy Glencore (-3,4%), crippled by the stake in Rusal, one of the Russian groups targeted by Washington.
MOSCOW FALLS, THE BOYARDS BURN 11,7 BILLION
The effects of the forthcoming US sanctions on the Moscow Stock Exchange are very serious -11,4% (in dollars -10,7%): according to Forbes, the 50 richest men in Russia have burned 11,7 billion dollars. Among the most affected companies linked to the king of aluminum Oleg Deripaska: The value of Rusal and En+ fell by almost a quarter, or 1,3 billion dollars. The ruble returned to above 60 to the dollar, the highest level since November 2017, and the threshold of 74 to the euro, the highest level since the summer of 2016.
Investor confidence in the euro zone deteriorated for the third consecutive month in April, impacted by fears of a slowdown in global growth on the back of escalating trade tensions between the US and China. The Sentix index fell this month to 19,6 from 24,0 in March.
SPREAD FALLS, 9,25 BILLION BTP AT AUCTION
In addition to the stock listing on Piazza Affari, the Italian bond market also shines alone in a session with limited volumes in which a certain appetite for risk prevailed from which Italy benefited more than other peripheral countries.
The yield differential between the BTP and the Bund on the 10-year segment stands at 127 basis points, the lowest since mid-February, from 129 at the end of Friday's session, while the 1,78-year rate is little changed compared to 1,77% of the last close, trading at XNUMX%.
The distances from the Spanish Bonos are also reduced. The yield spread between the BTP and the ten-year Bono fell to around 55 basis points, the lowest since the beginning of March.
During the medium-long auction on 12 April, the Treasury will make available to investors between 7,25 and 9,25 billion in the new 3-year BTP and in the reopening of the 7-, 20- and 30-year BTPs. In particular, between 3,5 and 4 billion will be offered in the new 3-year BTP (expiring in April 2021), coupon 0,05%. In addition, Via XX Settembre will make available to investors between 2 and 2,5 billion of the 7-year BTP (May 2025), between 750 million and 1,25 billion of the 20-year BTP (September 2038) and 1-1,5 billion of the 30-year BTP (March 2048).
TELECOM ITALIA: ELLIOTT ADVANCES, THE BOD SPLASHES, ASSOGESTIONI ABSTAINS
Telecom Italia closed slightly up +0,12%, but with strong volumes, equal to 2,55% of the ordinary share capital, while the clash between the board of directors and the board of statutory auditors is escalating. The board decided by majority vote (against the opinion of the independents) to sue the college which decided to integrate the agenda of the meeting of 24 April. However, the balance of power between Vivendi and Elliott turns in favor of the US fund which has risen to 8,8% of the capital with call options for another 4,9% up to 13,73%.
Furthermore, on the subject of appointments, the proxy advisers ISS and Frontis Governance suggest voting in favor of the six directors proposed by the Elliott fund at the shareholders' meeting on April 24th. Assogestioni's decision not to present its own list of candidates for the May 4 meeting could also be decisive. However, it is unlikely that in the event of a defeat, Bolloré will throw in the towel also because the value of his package, equal to 23,9%, is today much lower than the initial price (1,08 euros). Hence the prospect that Vivendi intends to weigh its share in any case. The international funds, with a 58% stake, are in any case inclined towards the plan presented by Elliott which provides for the spin-off of the Network (in view of the entry of Open Fiber as desired by CDP) and Sparkle from which a value of 7 could emerge billion, sufficient to reduce debt, raise the share to 1,6 euros and allow a return to the dividend.
DEUTSCHE BANK GIVES THE CHARGE TO THE ITALIAN BANKS
Day of bulls for the European banking sector, galvanized by Sunday's turnaround in Deutsche Bank. The institute has appointed retail sector specialist Christian Sewing as CEO, who replaced John Cryan with immediate effect, whose mandate would expire in 2020. After the euphoric start (+3%) the bank's stock slowed down, closing to +0,76%.
The basket of Italian banks gained 0,6%, substantially in line with the European sector. On the Milanese list, the former popular ones are strong: Banco Bpm +1,56%, Ubi +0,89% and Bper +1,51%. Against the trend, MPS lost 3,41%.
Creval's race continues (+2,4%). Analysts appreciate the agreement that the group has signed with Algebris Investments for the sale of a portfolio made up of guaranteed non-performing loans.
In an analysis of Southern European banks, Mediobanca Securities describes a "constructive picture" on the de-risking process for banks in the area, also thanks to a favorable macro context and the avoidance of regulatory risk. The goal, seen as a "mirage", of a 10% Npa ratio is within reach, adds the broker who, within the area analysed, maintains an overweight position on Italy where UniCredit, Ubi, Bper and Credem are the favourites.
Since January 10, the index of Italian banks has gained 2,2% and clearly outperforms the rest of Europe (Eurostoxx Banks index -XNUMX%) despite the persistent situation of uncertainty in the domestic political framework.
Among other financials, Generali +1%. The share of Edizione, the Benetton family's financial company, has exceeded 3% of the capital, reaching 3,05%, according to rumors it could rise further.
FinecoBank (+0,3%) raised 638 million euro in March, of which 330 million in assets under management. Acquired 9.299 new customers.
MONCLER AT THE HIGHEST, FERRAGAMO IN RED
Contrasted luxury market awaiting the arrival of the Lvmh accounts. In red Ferragamo (-2%), among the worst blue chips. BNP Paribas cut the target price to 18 euros from 21 euros, lowering the rating to Underperform from Neutral.
On the contrary, Moncler set a new historical record at 34,04 euros before correcting in the final to 33,40 euros. Brunello Cucinelli also did well (+1,12%) driven by the promotion to "neutral" from "underperfom" by Exane.
MORGAN STANLEY PROMOTES FCA
Also noteworthy was the performance of Fiat Chrysler +1% in a negative session for the French automotive industry: Morgan Stanley raised the target price of the stock to 23 from 22 euros, confirming the overweight recommendation. Ferrari +0,2%, after the second consecutive success in Bahrain.
SHOPPING IN FRANCE FOR ERG
Amplifon (+1%) marks a new historical record. Erg (+0,2%) bought two wind farms in France for 57 million. Technogym (-3,7%) and Mondadori (-2%) lose ground.
