BTP AUCTION, FIRST VOTE OF CONFIDENCE IN LETTA
MARKETS TRUST IN FALLING RATES
The day of truth arrives for the Letta government, at the head of the Italian State, the first public debtor (2.000 billion) and the first issuer of government bonds in the Eurozone (445 billion for the whole of 2013).
The first test is represented by this morning's auction of 5 and 10-year BTPs for an amount that will fluctuate between 4 and 6 billion.
The satisfaction of the markets was certainly held back by the "crime" near Palazzo Chigi in conjunction with the swearing-in of ministers at the Quirinale. The wounding of the two carabinieri sounds like a dramatic reminder of the conditions of absolute emergency in the Bel Paese.
In the meantime, Moody's confirmed the Baa2 rating for Italy on Friday, avoiding a downgrade which would have had negative effects for banks on access to the ECB counter. But he reiterated the negative outlook for Italy. Strong and rapid gestures are therefore necessary on the road to recovery, as well as decisions on Imu and redundancy fund financing.
The appointment of the week concerns the meetings of the central banks. Tomorrow will begin the two days of the Federal Reserve, where the race for Ben Bernanke's succession has already begun: Janet Yellen favored, in favor of an expansive policy.
But the key event will undoubtedly be the meeting of the ECB directorate on Thursday 2 May: according to forecasts, the European central bank should proceed with the reduction of a quarter of a point in the discount rate, a novelty already partially discounted by prices . However, it is not excluded that the central bank does not prefer to wait for data on the trend of the eurozone's GDP in the first quarter and thus postpone the cut to the June meeting. But news is also awaited on "innovative measures" to accelerate the transmission of credit to the system of small and medium-sized enterprises.
ASIA ON HOLIDAY, EUROPE SEEKS CONFIRMATION FROM THE BULL
Markets closed in Japan and China today. Shanghai will only reopen its doors on May 2. The Seoul and Hong Kong lists proceed without making a precise decision between increases and decreases.
Attention is focused on the confrontation between austerity and development in Europe, after the harsh sorties of the French socialist party against German politics. Wolfgang Schaueble preferred to ignore Paris (the real problem) to issue a warning to Enrico Letta.
Already last Friday, however, the market had shown that it appreciated Italy's political innovations, after two months of impasse. In the last week, the FtseMib index recorded a rise of 5,1%. Since the beginning of the year, the index has turned positive again with a performance of 1,8%.
The overall index of the Stoxx600 European Stock Exchanges has risen by 3,6% in the last five sessions.
On Friday, the London Stock Exchange fell by 0,3%, Paris -0,8%, Frankfurt -0,2%.
The improvement in government bonds was also formidable. The yield of the BTP fell below 4% for the first time since November 2010. The spread ended up below 270 and then closed the week at 285 (+4 basis points).
On Friday, the data on American GDP disappointed, growing by only 2,5%, against expectations of +3%. In the fourth quarter of 2012 the development was 0,4%. Conversely, a positive surprise came from the consumer confidence index (University of Michigan), which rose to 76,4 in April from 72,3 the previous month, against expectations of 73,5.
Wall Street indexes contrasted: Dow Jones +0,08%. Standard & Poor's -0,18%, Nasdaq -0,33%. According to Bloomberg, Verizon informed, in a confidential session, analysts on the offer presented to Vodafone to acquire the 45% owned by the British group in Verizon Wireless: the proposal is worth 100 billion dollars.
FIAT. FONDIARIA, RCS AND POPOLARI ON TODAY'S AGENDA
In the afternoon, Italian time, the meeting of Fiat Industrial and Fiat shareholders begins at Auburn Mills, Chrysler's vast headquarters, second in size only to the Pentagon, on the outskirts of Detroit. On the agenda are the quarterly reports of Fiat Industrial, now in the process of merging with CNH, and of Fiat. But attention will be focused on the dispute that opposes the Lingotto from the fund of the Veba union before the judge Donald Parsons of Delaware. It is a question of establishing the value of the 41,5% held by the Uaw. According to Moody's, the price will fluctuate around 3,5 billion dollars. And Fiat has already secured a line of credit for the same amount. The stock recorded a 12,1% increase last week. Exor also stands out + 9,1%
The market's reaction to the outcome of last Saturday's shareholders' meeting of Banca Popolare di Milano was in the spotlight: the majority of those present (4.700 voters) rejected the management board's proposal to allow remote voting for the meeting on 22 June in which it will be decided whether or not to proceed with the transformation from cooperative to spa. “It was not a slap in the face – minimized the president Andrea Bonomi – We have 60 days to convince the unions”. But the recovery plan, including the capital increase, is back in question.
Council-river yesterday in the Rcs house dedicated to quarterly accounts and to finalize the next corporate moves: reduction and subsequent increase in share capital; modality of the operation in two tranches (400 million by the summer, another 200 in 2015); calling of the shareholders' meeting at the end of May, preceded by a new board in which the terms will be set (discount, price and number of shares to be issued). Yesterday the board, absent Carlo Pesenti, Giuseppe Rotelli and the outgoing Andrea Bonomi, acknowledged the dissent of some shareholders, inside and outside the agreement. Paolo Merloni, now leaving the board, explained why he will not join the operation. Diego Della Valle and Gilberto Benetton, outside the pact, explained in a letter why they will vote against the operation, which is too dilutive for the current shareholders and too favorable, in terms of terms, to bank creditors. Among the shareholders adhering to the pact (58% of the capital) 44% of the members received acceptances, but Fiat and Intesa undertook to subscribe part of the unopted share up to 50%.
The reaction to the news concerning Monte dei Paschi di Siena is also significant. This morning the decision of the investigating magistrate of the Siena prosecutor's office was also being examined in Piazza Affari, which on Friday rejected the request for seizure of 1,8 billion against Nomura made by the prosecutors. The magistrate questioned the Prosecutor's prosecution system, arguing that there are no extremes either for fraud or usury.
Great performances during the week for StM, up 15%, Mediolanum +10,4% and Mediaset +10,1%.
Appointment this morning for Fondiaria-Sai members. In the last week, the stock has achieved a rise of 9,3%.
Eve of the general meeting for Generali. Mario Greco's first management meeting will be held tomorrow, the first not to be held during the weekend. The Greek CEO presents himself to the shareholders (foreign institutional investors will be present with an overall share of more than 10% of the capital) with a good performance: in the last nine months the stock has gone from 10,27 to 13 euros. The assembly will have to elect a smaller board (from 57 to 19 members).
Great performances during the week for StM, up 15%, Mediolanum +10,4% and Mediaset +10,1%. Enel also stands out +8,5%. The best of the banks was Unicredit +8,3%.
