The Chinese crisis is destined to take hold also in August. The data arriving this morning from Beijing are worse than expectations, which are already negative. The Markit index which signals the trend of manufacturing activities fell to 47,8, the lowest level since August 2012, well below forecasts (49,6). Meanwhile, the director of the Beijing statistics institute, Sheng Shongseng, declared that the economic situation will remain weak for the next six months, given the decline in investment in infrastructure.
CHINA IN DEEP RED. DOWN THE BAGS IN ASIA
Beijing's difficulties have put Asian stock markets under pressure. Tokyo and Sydney drop -0,5%, Hong Kong loses 1%. Target shooting on listed stocks has resumed Shanghai -2,3% and Shenzhen, which lost about 14% in July. The bad performance of the Chinese Stock Exchanges is consequently affecting the forecasts of the large European and US companies.
According to Factiva, about half of the S&P 500 companies have referenced the Chinese crisis in their forecasts for the next six months.
More commodities are under pressure: oil opens the week at 51,86 dollars a barrel in the Brent version (-0,2%) 46,82 for Wti crude. Over the course of July, WTI crude lost 21%. Brent is slightly better -18%. The ruble once again struggled -8,1% over the month. Gold also down -7,5%.
THE GREEK STOCK REOPENS AFTER 5 WEEKS
Reopens its doors today, after a five-week stop, the Athens Stock Exchange, an eloquent sign of the overcoming, at least in the immediate future, of one of the hotbeds of crisis that marked the progress of the markets in July. The Greek drama is far from over, as confirmed by the IMF's decision not to participate in the third aid plan, in the absence of structural intervention on the debt, and will reserve new tensions before August 20, the expiry date of a debt tranche true the EU (54 billion). Therefore, expectations remain alive for the reaction of the market where the restrictions on capital movements decided on 29 June remain in force.
Meanwhile, talks with the Trojka have resumed. Among the measures under discussion after the start of the pension reform – which includes the farewell to baby pensions and the increase in the retirement age – still include the reintroduction of collective redundancies and the abolition of collective bargaining. Meanwhile, negotiations are also underway between the representatives of the Greek banks and those of the ECB, to avoid the hypothesis that, in the event of restructuring, there will be a large 'haircut' on deposits above 100 thousand euros
MILAN +4,8% RECOVERS JUNE LOSSES IN JULY
July rewarded those who bet on mature markets. Despite the Greek crisis, the European Stock Exchanges are at the top for performance: the Eurostoxx 600 grew by 3%, against the 8% drop in the Morgan Stanley index of emerging countries. Piazza Affari closed the month of July with an increase of 4,8% which makes up for the drop in June (-4,4%).
The Milan stock exchange expanded its performance since the beginning of the year, bringing it to +23,8%, confirming itself in first place overall among the stock exchanges of the main countries of the world and in second place, behind Tokyo (+24,9%), if performance is calculated in euros.
In our currency, the American S&P500 has gained 12,5% since the beginning of the year, the Nasdaq 19,2%. ??The Paris Stock Exchange boasts a performance of 18,9%, Frankfurt +15,3%. The overall index of the Stoxx600 European Stock Exchanges rose by 3,9% in July and has gained 15,7% since the beginning of the year.
The debt markets of the Eurozone are also making a big recovery. The spread between Btp and Bund fell by 54 points, returning to the levels of May. The Italian 1,79-year yield slipped to XNUMX%.
MARKET MOVERS: US EMPLOYMENT, BANK OF ENGLAND
Standing out among the week's appointments is the data on new US jobs, which will be released next Friday. The forecast is 225 more jobs, in line with the July data. No change is foreseen for the percentage of the unemployed, around 5,35. The focus is on wage trends, one of the data the Fed is watching most closely in view of the rate decision.
BUSINESS CENTER: BOD OF ATLANTIA AND SALINI. WAITING FOR ITALIAN POSTAL
In Piazza Affari the quarterly reports of Atlantia, Astaldi and Salini Impregilo (conference call in the afternoon). The boards of Energy, Marr, Molmede Ross also meet. Among the most awaited quarterly in Europe Heineken, Commerzbank and Porsche.
Everything is ready for the application for admission to the Poste Italiane Stock Exchange. On Friday 31 July, the board of directors and the shareholders' meeting approved the listing application and the proposal to the shareholders' meeting for the adoption of the new Articles of Association. The operational phase will start this week. The Treasury, as a shareholder of Poste Italiane, is ready to proceed with the sale of up to 40% of the company's capital "through the use of a public offer of sale aimed at the public of savers in Italy, including employees of the Poste Italiane group , and/or to Italian and international institutional investors”. BancoPosta Fondi SGR and Anima Holding meanwhile signed the announced industrial collaboration agreement in the retail asset management sector.
FLY UNDERSTANDING AFTER THE ACCOUNTS. WAITING FOR UNICREDIT
The market's attention is focused on the banking sector. In the spotlight there will still be Entente: +1,2% Friday, following the results announced in the afternoon. The bank declared a profit for the second quarter well above analysts' forecasts and confirmed the distribution of 2 billion in dividends over the 2015 financial year. The stock rose by 1,2%.
But the focus is also on Unicredit +1%, awaiting the board meeting on Wednesday 5, preceded by rumors about the reorganization of the top management starting from the departure of the general manager Roberto Nicastro. For the quarterly, the consensus expects a profit up 12,4% to 453 million euro. The first quarter ended with a result of 512 million. The January-February period could therefore touch one billion. For the entire year, the forecast is 2,25 billion euros.
“Federico Ghizzoni – writes the Financial Times this morning – is trying to make a change that will allow to increase profitability and allay investors' fears about new capital requests”. The bank, the only Italian institution with global dimensions, is looking for solutions that allow it to raise the tier one ratio, currently at 0,1%, to the levels required by the Basel rules. It is not an easy mission, given the capital increases of recent years, and the stock market performance: only +2% since the beginning of the year against Intesa's 50%.
TOMORROW THE MEDIOBANCA ACCOUNTS, THURSDAY RELAY IN MPS
Thursday 6, on the occasion of the board meeting Alessandro Profumo will take his leave of Banca MontePaschi (+1,7% on Friday) to be replaced by Massimo Tononi, former president of Borsa Italiana. There is great anticipation for the numbers of the Sienese bank, called to confirm signs of recovery at the end of the first quarter. Profumo meanwhile took over the majority stake in Equita Sim in the hands of the private equity company Jc Flowers, together with the top management of the Italian broker.
Great attention also for Mediobanca (+3,1%) in view of tomorrow's approval of the accounts for the 2/14 financial year: rumors are growing about the bank's possible shopping on the European asset management market.
TELECOM WAITS FOR THE WIND-3 MERGER
Maybe it's the right time: on 6 August Vimpelcom, controlling shareholder of Wind, will present the half-yearly accounts. It will be an opportunity to provide the market with information on the state of the art of the merger negotiation with 3.
The operation could have immediate repercussions on Telecom Italia: the reduction from 4 to 3 of its competitors on the Italian market is undoubtedly good news for the former incumbent, awaiting news on the investments (and incentives) front for investments in new generation networks.
Possible negative reactions for Mediaset's purchase of Mtv by Sky, the publisher positioned at number 8 of the remote control.
Threadneedle Asset Management increased its stake in Ei Towers capital to 9,124% from 5,04% previously.
TREVI UNDER FIRE FOR DRILLMEC PROBLEMS
The spotlights are on Trevi Finanziaria Industriale, -14%, the lowest in the last ten years, after having corrected the forecasts for the whole of 2015 downwards. The company, owned by the Strategic Fund, will have to face a series of extraordinary costs linked to critical in the activity of the subsidiary Drillmec, specialized in the construction of drilling rigs in the Oil & Gas sector.
Due to adverse weather conditions encountered in the execution of a contract, Drillmec will suffer a loss of 82 million euros.
Since the beginning of the year Trevi has fallen in Piazza Affari by 36%, the capitalization has been reduced to 294 million euros. Kepler Cheuvreux has lowered the target price to 1,8 euros from 2,4 euros. The recommendation is Reduce.
