Give us more time. The Sos aimed at European Supervision was launched on Wednesday by the top management of Monte Paschi meeting in Milan with the advisors of JP Morgan and Mediobanca to try in extremis to prevent the bank from having to resort to state intervention. But the public bailout is greatly appreciated by Piazza Affari. as evidenced by the leap forward of the share, +10,8% yesterday, the highest since May. In short, the Stock Exchange is rooting for a "grave" solution, leaving politics the burden of how to distribute the inevitable price between savers and taxpayers. A boulder that will weigh on the timing and modalities of the government crisis greeted by an almost surreal market rally, given the situation of our local banks.
THE ECB AT THE CROSSROADS ON QUANTITATIVE EASING
But the euphoria of the price lists can be explained by the expectation of the decisions that the ECB is about to take. The directorate will have to choose today whether to extend for six months, from March to September, the deadline for the purchase of securities for 80 billion a month (the most accredited solution) or whether to reduce the amount to 60 billion but for a period of nine months. The difference in absolute terms is minimal but, on a political level, a reduction in the amount of monthly purchases would be interpreted as a concession by Mario Draghi to the pressure of the Bundesbank hawks. A dangerous sign of weakness, given the fragility of Italian banks.
It will be up to Draghi himself to find the umpteenth squaring of the circle, trusting in the unexpected help arriving from overseas: the strength of the dollar, combined with the expectation of an increase in spending from Washington is giving a large EU manufacturing while the rise of the oil is approaching the recovery of inflation. The recovery is at hand, also to the benefit of the banks. As long as he's on the mend.
ASIA ON THE RISE, S&P NEW RECORD
Weather Bag with two speeds. Apparent calm in the morning, afternoon conditioned by the winds arriving from the ECB. The rest of the global economy is in the air of great ferment.
Asian stock exchanges are advancing on the wave of gains in US and European markets. The leap forward of Tepco +0,8% in Tokyo +11,8% should be noted. The operator of the Fukushima nuclear power plant has obtained a zero-interest loan to offset the cost of decontaminating the site.
Brilliant Sydney +1,2%: iron prices are dragged up by the recovery in world demand. Hong Kong+0,8%. Stable Shanghai.
The rally of US stock exchanges picks up speed, with new absolute records for the Dow Jones +1,55% to 19,549,62 points and for the Standard & Poor's 500 +1,32% to 2.241,35, The Nasdaq gains 1,14 %,
New absolute record also for the Dow Jones Transportation +2,5%, the index which is considered the almost infallible signal of economic trends, given the clear increase.
Finally, in the afternoon, the launch of an automatic program of purchases on the list for 3 billion dollars contributed to favoring the Bull.
In this context, the race of Goldman Sachs continued +1,8%, once again the best blue chip. JP Morgan +0,45% absorbed in a few hours the fine (337 million dollars) imposed by the European Commission for rigging the prices on the Euribor.
The Trump effect this time has hit the pharma industry, already enthusiastic about his election. In an interview with Time, which elected him man of the year, the new president was drastic: “I will lower the prices of medicines. I didn't like what I saw happen to drug prices." Wall Street's reaction was immediate: Pfizer lost 2,5% to $30,5, the lowest in the last month. The entire pharmaceutical sector falls -0,8%, biotech does worse -2,9%.
Oil prices rose slightly this morning against a weaker dollar: Brent rose to 53,04 dollars after losing 93 cents yesterday; the WTI trades at 49,90 (+ 1,10 dollars compared to yesterday).
Oil stocks rose in Piazza Affari: Eni +1%, Saipem +1,3%, Tenaris +1,3%.
MILAN STILL LEADER. DEUTSCHE BANK TO THE RESCUE
The euphoria of Piazza Affari yesterday infected the other European stock exchanges, electrified by the prospect of the ECB directorate. Die Handelsblatt has not ruled out that the central bank may consider buying stocks today.
Milan remains at the head of the movement +2,1%, the FtseMib index over the barrier of 18 points (18.130).
Positive day for London +1,81% (pending the appeal verdict on the obligation of a parliamentary vote for Brexit; Paris, +1,36%; Madrid 0,75%.
Frankfurt stands out among the price lists of the continent: +1,96% on the wave of an economy in excellent health. German industrial orders grew by 4,9% in October compared to September against a consensus of +0,6%.
The star of Deutsche Bank shines +5,40% considered until a few months ago the great sickness of Europe. The stock, which had fallen below the 10 euro threshold in September, closed yesterday at 17,48 euro, after recovering more than 60% of its value in recent weeks.
IMPROVE THE SPREAD, UNDER PRESSURE THE TARGET 2
The resignation of Prime Minister Matteo Renzi has not depressed the Italian secondary sector. The Italy/Germany spread widened slightly in the afternoon, but remained at its lowest for about a month at 155,50 basis points. The Italian 1,91-year trade is around XNUMX%.
Among the negative signs is the worsening of the Italian Target2, which records the country's liabilities on the Eurosystem payment system. The figure rose to 358,612 billion euros from the previous record of 355,459 billion recorded in October. Target2 debt is now well above the August 2012 peak (289,320 billion), reached in the most intense phase of the financial crisis in the euro area. In the latest issue of its economic bulletin, released in mid-October, Bank of Italy once again underlined that the evolution of Italy's Target2 debt is "largely" a consequence of the creation of liquidity deriving from the purchases made by via Nazionale itself within the of the Qe programme. Furthermore, Bankitalia observes that the increase depends on the reduction in bond funding by Italian banks on foreign markets and on the diversification of household portfolios in favor of managed savings, with a "significant share" of foreign law funds.
MUSTIER: FOR THE INCREASE WE WILL DO IT YOURSELF
This morning Unicredit, (yesterday +9,42%), announced the agreement with Powszechny Zaklad Ubezpieczen (Pzu) and Polski Fundusz Rozwoju (Pfr) for the sale of a stake equal to 32,8% of the share capital of Bank Pekao.
The price agreed for the sale of the stake in Pekao is equal to 123 zlotys per share or 10,6 billion equivalent to 2,4 billion euros, equal to 1,42 times the shareholders' equity as at 30 September. In parallel, in order to complete the disposal of the entire stake in the company, UniCredit intends to launch a market operation for the sale of the residual stake in Bank Pekao equal to 7,3% of the share capital through the issue of equity certificates linked secured by a pledge on the shares.
Yesterday evening, as he entered La Scala, number one Jean Pierre Mustier said: "We'll do it ourselves", responding to the eventuality of state intervention for the capital increase. In addition to the political crisis he commented: “Italy is a fantastic country. For us, the elections will not create problems”. The manager did not want to comment on the extent of the capital increase which could be up to 13 billion according to rumors. “No Way – he said – wait for Tuesday”. The sale of a further stake in Fineco +1,2% is not excluded, which yesterday was among the least brilliant stocks in the sector. As regards the sale of Pioneer to the French group Amundi, the hypothesis is emerging that the operation also includes part of the payment with treasury shares (up to 10% of the capital).
MONTE PASCHI: THE MARKET LIKES THE STATE SOLUTION
The protagonist of the day was Monte Paschi +10,79% on the day in which the board of directors met to take stock of the recapitalization. The game is now being played out on two fronts: on the one hand, the institute has asked the ECB for more time to carry out the operation, going beyond the deadline of 31 December, hoping that the evolution of the political crisis will convince the sovereign wealth fund of Qatar and other investors to carry out the capital increase. On the other hand, the alternative hypotheses based on the entry of the State into the capital, the so-called plan B, are increasingly concrete: a "precautionary" capital increase, the forced conversion of subordinated bonds with some form of compensation for savers who have subscribed those bonds in 2008.
The so-called plan B will be included in the omnibus decree which should include the rules on mutual banks and the amendments to the law on cooperatives.
Double-digit increase for Bper +10,41%, among the Popolari, Bpm +6.29% and Banco Popolare +6,38% recover. Mediobanca +4,80%; Ubi Banca +4,69%.
GENERALI, TELECOM, LEONARDO: THE BLUE CHIP FESTIVAL
The effervescence has infected a good part of the blue chips:
Generali's flight continues +7,33%. Followed by Banca Generali +5,67%: the rally triggered by the positive assessments of analysts on November funding continues.
Telecom Italia +5, 085, Vivendi strengthened its stake in the capital to 24,19%. Mediobanca Securities confirmed the outperform rating and the target price of 1,23 euro
Leonardo Finmeccanica +3,05%. Bank of America-Merrill Lynch analysts raised their judgment to buy from neutral, target price at 15,5 euros.
Fiat Chrysler +1,17% remains among Morgan Stanley's top picks with an overweight recommendation and a target price of 11 euros.
At the end of the main list, Luxottica -1,39% and A2a -1,35%.
