S&P'S AX ON US BANKS SCARES LISTS
CUTS ON ITALIAN PENSION COMFORTS THE EU
From the Europa construction site comes the echo of the work in progress. The markets are awaiting the outcome of yet another summit, not too confident. Yesterday the finance ministers decided that the bailout fund will be strengthened, but it is not yet known by how much. In this regard, the decision to ask for the collaboration of the IMF (which could receive the funds of the ECB which cannot lend to individual states) takes on substance. Meanwhile, Commissioner Olli Rehn presented the result of his trip to Rome: 16 pages entitled "Addressing Italy's high-debt/low-growth challenge", a concentrate of diagnoses and therapies for the Bel Paese. "No surprises" commented Mario Monti. Meanwhile, the squeeze on social security is taking shape: for old age pensions it will take from 41 to 43 years, the automatic increase will not start in January.
THE BTP SEES THE STARS. Mission accomplished, but at what cost. The Treasury has placed all the 7,5 billion BTPs envisaged, with a request largely exceeding supply, but with record yields: 7,89% (from 4,93%) for three-year BTPs; 7,56% (from 6,06% at the end of October) for 7,28-year bonds and 8% for 7,18-year BTPs. On the secondary market, the day ended with the 490-year BTP almost unchanged (yield at 0,3%) and the spread with the Bund at 0,3 points. The tension remains sky-high but, probably, the Stock Exchanges feared worse. In the end, in fact, the balance is positive also thanks to the surprising growth of the consumer confidence index in America. In Milan, the FtseMib index rose by 0,4%, London also gained 0,9%, Paris +XNUMX%, Frankfurt +XNUMX%.
UNCERTAIN TIME ON THE PRICE LISTS. Futures on S&P's have taken the downward path after the downgrade of the main US banks. Contracts are trading 0,5% lower in Tokyo this morning. Asian markets were also down: the Nikkei 225 lost 0,69%, Hong Kong's Hang Seng 1,70%. Futures on the English Footsie are also down. It is easy to foresee that nervousness is destined to infect Europe while awaiting news from the Ecofin summit.
ROUBINI. Mister Doom, as usual, uses the hatchet. Italy won't make it, despite a very tough recipe that will lead from recession to depression. Therefore the Bel Paese must restructure its debt, making the international creditors who own 40% of the debt contribute to the sacrifices. The alternative, ie a capital structure capable of lowering the debt from 120 to 90% of GDP, would have devastating consequences on the country's possible recovery.
DOWN THE RATING OF US BANKS. ON THE VOTE OF THE CHINESE
“WITHIN A FEW DAYS” THE DOWNGRADE OF FRANCE
S&P has cut the rating of Bank of America, Goldman Sachs from A to A-. The operation, as part of the review of the criteria adopted for 37 large international banks, has already affected Bofa Merrill Lynch, Morgan Stanley and JP Morgan Chase ( from A+ to A). The Bank of China's grade was instead revised upwards from A- to A; the institution thus joins the China Construction Bank and the Industrial & Commercial Bank of China, which has been confirmed as A, a step above the big ones in Manhattan. According to the Tribune, however, the countdown to the downgrading of France's rating has now started: within ten days there will be relegation, now taken for granted by the markets.
IT BOND USA AT 30 FOR THE FIRST TIME BELOW THE BUND
AND CDS ON GERMANY EXCEED THOSE ON ITALY
For the first time since March 2009, the 30-year Treasury Bond yields less than the equivalent German bond. It is another sign of the contagion of the crisis of confidence in the euro area which has hit the locomotive of the European Union. And he's not the only one. In recent days, reports the Financial Times, the fever for the CDS and against the default of Germany has exploded. Last week, CDS trades on Germany risk exceeded those on Italy in volume and are about to overtake those on France as well. On the contrary, since yesterday Australia has returned to the triple A club with the latest promotion, that of Fitch.
GUBITOSI NEW COUNTRY MANAGER IN MERRILL LYNCH
Luigi Gubitosi will be Bofa Merrill Lynch's new country manager for Italy. The former CEO of Wind (formerly financial director of Fiat) will take the place of Maurizio Tamagnini, who has moved on to lead the strategic fund of the Cassa Depositi e Prestiti.
DEBT EMERGENCY: MPS FOUNDATION LEAVING CDP
THE JEWELS OF FONSAI IN A VEHICLE OPEN TO PARTNERS
The EBA took another week of time before setting the amount of capital increases required of banking institutions. Meanwhile, the Mps Foundation dossier, forced to reinstate the guarantees on the loan signed to participate in the bank's capital increase, is enriched with new chapters. After the sale of the stake in Intesa and 1% of Mediobanca, the stake in CDP could be monetised. Conversely, the Cassa Depositi e Prestiti could support the Foundation in controlling the bank. Meanwhile, the hypothesis of a vehicle to park the strategic shareholdings of Fonsai, another victim of the siege of debts, is taking shape. In the parking company (destined to welcome new shareholders) the equity investments in: Generali (1,13%), Mediobanca (3,8%), Rcs (5,5%) would be placed. Pirelli (4,5%), Unicredit (0,33%) and 0,40% in Mps. That is, a package of 830 million euros (2010 budget values, largely to be discounted). By the end of December, the sale of properties for 120 million will be defined, in addition to the release of the goodwill and other measures necessary to strengthen the capital ratios of the group.
In Piazza Affari, banks and insurance companies moved in no particular order: Intesa rose by 0,1%, Ubi +0,1%, Banco Popolare +1,4%, Pop Emilia +1,9%. Unicredit -0,9% and Mediobanca -2,3% are down. Even among the insurance companies there were scattered movements: Generali gained 1,3%, Unipol fell by 3,2%. In the Ligresti group Fondiaria-Sai lost 2,6%, the subsidiary Milano Assicurazioni jumped by 8,1% on the assumption of a possible sale. In asset management, Azimut leaps +4,3%, ready to ride the BTP day with the launch of the Stability fund, dedicated to Italian public debt. Seat's council +25% which should have decided whether to pay the Lighthouse bond coupon or enter a phase of technical default was postponed by a few days.
The agreement between shareholders, bank creditors and bondholders still lacks the consent of the CVC fund, one of the reference shareholders. For the rest, the price list experienced a nervous session yesterday, closed with modest movements (at least these days). The automotive stocks contributed little to the increase: Pirelli +1,5%, Fiat +0,1%. Fiat Industrial decreased -1,7%. End of session tied for Finmeccanica and Ansaldo. Construction stocks were positive. Buzzi +3%, Cementir +4,3%.
