HELLO ITALY. THE ECONOMIST SUPPORTS MONTI AGAINST MERKEL
"Hello Italy". The Economist takes sides alongside Mario Monti (alias Full Monti, as defined by the Financial Times) in his confrontation with Germany with the same enthusiasm with which Silvio Berlusconi fought in the past. The editorial of the most prestigious weekly in the world, after noting that the fate of the euro and of Europe will be decided in the coming weeks, concludes as follows: “Italy needs structural reforms, but also more sustained demand. Monti is not asking Germany to reflate its economy, because he knows Berlin would say no. But he is pressing for the Germans to liberalize their services, which could increase private consumption. And he wants lower rates on Italian debt, to please squeezed taxpayers and keep the corporations hit in their interests at bay. All of this requires support from the ECB on the market or a more robust bailout fund”.
“If these economic arguments do not convince Merkel – concludes the editorial – the political arguments should succeed… Monti notes that resentment against Germany, a symbol of European intolerance, is already growing in Italy: the worst threat for the euro would be a populist revolt in the most indebted countries. Merkel should remember this“. She is to see that, at this rate, the Chancellor will regret Berlusconi, a convenient alibi for the European sins of the lobbies across the Rhine.
A precious help for Monti on the eve of the appointments, hopefully decisive, for the next ten days. With the interlude of liberalizations in Italy (plus the welcome novelty of the release of public payments to businesses) and a quick blitz in Tripoli: super Mario never stops.
Strange but true: S&P rejections are good. Who knows whether the Trani magistrate who yesterday had the agency's Italian headquarters searched for evidence of market abuse and insider trading will take this into account. It had happened in August to the US T-bonds, history repeated itself yesterday in Paris. In first auction after the loss of triple A, the French Treasury it sold securities worth 7,9 billion with medium/long-term maturities, recording a general drop in yields. The maximum amount announced was 8,5 billion.
Also 'spanish auction it ended with a fiesta: Madrid placed 4, 7 and 10-year government bonds for a total amount of 6,6 billion euros, well above the announced target of 4,5 billion. On the ten-year maturity, the yield fell to 5,40%, from 6,97% at the previous auction. Meanwhile, the 10-year BTP fell to 6,33%, 12 points below. The spread with the bund drops to 448 bp.
WEATHERBAG. CLOUDS FROM GOOGLE, CLEAR IN ASIA. THE NEW MOON BRINGS PROMISES FOR THE TAURUS
The only negative note comes in the evening with Google accounts. The search engine ended the quarter with higher costs combined with an unexpected revenue slide from its core business. The market reaction was immediate: -10% in the after hours. On the other hand, the rival Microsoft smiles: profits better than expected, stocks up 2% after the session.
But the Google slip, while the confrontation on computer piracy escalates, it does not weigh on the good mood of the markets. The US price lists closed on the rise thanks also to the performance of Morgan Stanley and Bank of America, both up by a generous 4%: Standard & Poor's 500 +0,49%, Dow Jones +0,36, Nasdaq +0,67%. Among the 35 companies that have already announced their quarterly results, 22 have done better than expected. General Electric accounts will be announced before opening today.
Optimism also reigns over the Asian bags. Tokyo is up 1,55%, Hong Kong is also up +0,55% and Shanghai +1% before the long holiday. The Chinese Stock Exchange will be closed all week for the Lunar New Year holiday. Hong will only be staying for three days.
The run of government bonds explains the rebound of the European stock exchanges. The FtseMib index rose 2,4%, Paris gained 1,9%, Frankfurt +0,9%, London +0,8%. The rally in Milan is due to the extraordinary rebound of the banks.
UNICREDIT ACCELERATES AHEAD OF THE GOAL. CALTAGIRONE TAKES A STEP BACK FROM SIENA
The finale of is worthy of the triumphal march of Aida Unicredit + 12,9%, on the eve of the last day of trading of rights for the capital increase. Today the rights of savers who do not intend to subscribe will rain on the market but the flood, according to the forecasts of the consortium, will not occur. Among the big names, the two Libyan shareholders will not subscribe, with the result that the overall share will drop to 4,3% from the current 7,2%; on the contrary, the Abu Dhabi al Aabar fund will rise to 6,5% from the current 4,9%. The share of the US Capital Research fund increases. Luigi Maramotti, already strong by 2,2%, subscribes only in part. Intesa advanced by 6,1%, Mediobanca +9,4%. Stellar rise for Banca Popolare di Milano +17,6%. A glorious day also for Banco Popolare +13,8% and Ubi +6,2%, two of the institutions that today will present their plan to the Bank of Italy to flesh out the capital, as requested by the EBA, without onerous operations.
Salt, but with more caution, too Ps + 3,50%. The plan, approved yesterday by the board of directors, to replenish the capital (3,2 billion) will arrive at the Bank of Italy today as requested by the EBA. No capital increase is foreseen or, as claimed by the Financial Times, an intervention by the CDP. Rather, action will be taken on cashes, divestitures (but the Crt Foundation has made it known that it is not interested) and "the optimization of industrial assets". Will it be enough? Probably not, if the dividend is not distributed. Indeed, the cleanup operation with the demolition of the goodwill of Antonveneta (7 billion) is not excluded, which would allow the institution not to pay interest for 160 million on the Tremonti bonds. The quotations of the Btp in the hands of Monte will resume. Maybe yes if, when it comes to defining a new "buffer" for the Monte (in the spring) the values will have returned to more normal levels.
For now, however, the real sensational news is another: Francesco Gaetano Caltagirone, the former most liquid man in Italy, has sold 1,1% of the capital of Mps, for a total value of approximately 25,6 million. The shares, it is reported in the press releases on internal dealing, were sold between 13 and 18 January at prices between 0,20 and 0,23 euro each. Caltagirone, following the MPS increase last summer, had about 4,7% of Rocca Salimbeni. What is the significance of this move? Beyond the financial strategies, the retreat anticipates that Caltagirone, convicted in the first instance for the takeover of BNL, will take a step back from the Monte vice-presidency.
The resurrection of the banks did not stop at Chiasso. In Europe, the Stoxx index of banks scored a jump of 6,1%. In Paris, Société Générale rose by 13%, BnpParibas +8,2%. In Frankfurt Deutsche Bank rises +8,4% but the real bang does Commerzbank up 14% after announcing a capital increase in function of the Eba of 6 billion euros.
Sore points, however, for the companies touched by liberalization decree that the government is preparing to launch today. Atlantia weakens -0,1%, Snam loses ground -2,1% while Eni likes it +3% with less debt: the activist fund Knight Cpiatl returns to office, which controls just under 1,5% of the dog six-legged: the sale of Snam will cause Eni to collect 6 billion but, above all, will allow it to deconsolidate 11,5 billion of debts.
In general, it was one day of weakness for all utilities, including Enel -2,2% and Enel Green Power, unchanged. Fiat Industrial +4,9% and Buzzi +5,3% stand out.
