ONLY PEOPLE'S BANK IGNORES UKRAINE. EXCHANGES DOWN, GOLD AND OIL RISE
The Kiev effect hits European price lists. In Milan, the FtseMib index, which slipped below 20.000 points at the start, fell by 1,62% to the 20110 level. In Europe, Frankfurt fell more -2,24%. Paris -1,73%, Madrid -1,65%. London is down 1,14%. The euro weakened to 1,377 from 1,380 at the close.
The bund yield falls by 4 basis points to 1,57%. The Btp/Bund spread is around 190 bp (196 bp the ratio with the Spanish Bonos). The disintegration of Ukraine causes a drop in European stock exchanges, sends oil to its highest level since September and pushes up the prices of safe haven assets. The price of WTI-type oil rose to 104,2 dollars a barrel, up 1,6%, the highest since September. Brent is up 2% to $111.
Prices of agricultural commodities are on the rise as there are fears for the harvests of Ukraine, one of the world's major producers of wheat and other cereals. The benchmark gold future rises by 1,6% to 1.347 dollars an ounce, the highest in the last 4 months, gaining 6,5% in February. Financial reporting today offers a strange blend of global finance connections and a remake of the Cold War.
The two main indices of the Moscow Stock Exchange, the Micex and the Rts, lost 5,80% and 7% respectively. Gazprom loses 13,14%: the company controlled by the Russian government is particularly exposed to political tensions in Ukraine, since the gas pipelines used to supply the European market pass through the country. Heavy losses also for Sberbank -11,23%, Oao Mechel suspended after losing 20% and Magnitogorsk Iron & Steel Works -15,01%.
The euro surpassed the symbolic threshold of 50 rubles, a level never touched, and the dollar rose to 36,85 rubles, surpassing the record set in 2009. In response, the Moscow central bank raised the discount rate by 150bp , without, however, stopping the hemorrhage of capital.
The desk Popular +3,13% shines in a stock market dominated by the minus sign. On Saturday, the shareholders' meeting approved by a very large majority the capital increase of 1,5 billion which will start on March 31st and end on April 17th. This morning Deutsche Bank raised its recommendation to Buy from Neutral, target price at 2 euros (against 1,4 previously).
Banca Popolare di Milano returns to positive ground +0,52%, another institution that is approaching the capital increase. On the contrary, the Popolari, which have no operations in sight, are slowing down: Bper -3,02%, Ubi Banca -2,02%. Also declining Understanding -1,78%. Monte dei Paschi -1,41%. Most of all it gives ground Unicredit -3,3%, which has a subsidiary in Ukraine.
In Paris he retreats SocGen -4.% highly exposed to Kiev. The Ukrainian crisis also weighs on Metro -5,2% in Frankfurt: the possibility of listing the Russian subsidiary vanishes for ota. Buzzi Unicem, which has a significant presence in Ukraine, also fell by 2,8%. The Russia-Ukraine aggregate generates about 15% of Ebitda.
All the main industrialists fell: Pirelli -1,9%, Fiat -1,12%, Exor -1,93%. StM -1,83%. Telecom Italia loses 1,28%. Trevi -1,09%. The company won a $44 million contract in Wyoming to maintain the Bolivar Dam on the Green River. The jewelry brand Damiani yields more than 9%: the hopes of a takeover are diminishing.
