MONTI BREAKS THE ENI-SNAM RETE GAS CHAIN. FOR THE "INEVITABLE" FT, HELP FROM CDP TO MPS
Mario Monti announces for Friday "a second round of measures to increase growth" and assures: "I will convince the markets that Italy is solid and reliable". During his visit to the City, the prime minister anticipated the decision to propose, as early as Friday, the separation between production and distribution in the gas sector, i.e. the sale of Snam by Eni, but added that he has not yet defined the matter in detail. Monti also said that in terms of privatizations the moment is not good to implement them due to low stock market prices. Eni will have two years, according to the decree under study, to drop to 52,20%. However, it is possible that a decision will be made to proceed with the "merger" between Snam and Terna, already studied by Mediobanca, which would give life to a large network company.
Shock preview from the Financial Times. According to the newspaper, which cites unspecified sources as "European officials" (the EBA?) "it is almost inevitable that the German Commerzbank and Monte dei Paschi di Siena fail to produce credible projects that avert the need for capital arriving from outside (5,3 billion for the Germans, 3,3 for the Tuscan bank), exposing both banks to "nationalisation". As far as Mps is concerned, the intervention of the Cassa Depositi e Prestiti is considered probable, either directly or through support for the Mps Foundation. MontePaschi yesterday suffered a fall of 2,7%.
"I note with pleasure that the importance of equipping the Fund with the necessary firepower to counter the weak economic situation and the various regional challenges has been acknowledged". With these words Christine Lagarde, director general of the IMF, endorsed the rumors of an imminent increase in the IMF's endowment: 500 billion fresh, to be added to the 387 billion already available, to be used over the next two years to support European countries in difficulty.
The news fueled the revival of the euro (1,281 against the dollar from 1,273) and sovereign debt. The yield on the ten-year BTP fell by 8 basis points to 6,37%, the spread with the Bund narrowed to 459 points, close to the lowest since last December 20th. Meanwhile, another item was taking shape on the markets: the government of Athens it would be close to an agreement with private investors on debt restructuring.
This message had a limited effect on European markets. Milan -0,31% and Paris - 0,15% closed in negative territory. London +0,15% and Frankfurt +0,34% are just above parity. The following have taken care of curbing the euphoria: a) the downward revision of the German GDP for 2012 (+0,7% against the previous estimate +1%); b) the slowdown of the global economy according to the World Bank (from 3,6 to 2,5%) due to the European recession.
More music on Wall Street and Asia. The US stock market was galvanized not only by the announcements from the IMF, but also by the performances of Bank of America +2,5% and JPMorgan +2% but above all by Goldman Sachs +5% which closed the fourth quarter of 2011 with a profit of share of $1,84, beating analysts' expectations. The performance of the indices (Standard & Poor's 1,11%, Dow Jones + 0,78%, Nasdaq +1,53 ) was also affected by the data on confidence among home builders which rose in January to the highest level in the last four years.
Meanwhile, the Nikkei index rises in Tokyo +1,12%, the Hang Seng in Hong Kong marks +1%. The Asian giants, India and China, have taken the path of expansion to limit the impact of the European recession. Beijing has removed lending constraints for its five largest banks.
New Delhi announced a massive plan ($35 billion) of public investment. The bill will be paid by 17 conglomerates with a public majority which will have to put their reserves to finance the New Deal wanted by Manmohan Singh, the economist who leads the country which has reduced the GDP growth rate from 9 to 7 percent.
STM LEADS THE “AMERICANI” RALLY. In Milan it was the day of StM + 5,4% driven by data from Asml, the European leader in chip machinery, the thermometer for measuring the health of a sector distinguished by rapid accelerations and sudden braking. Even the indications from Wall Street this time favor optimism: the Sox index of companies in the semiconductor industry rises by 4%, the highest since July 2011. Texas Instruments scores +6%, Intel +1%.
But the main push comes from the dollar which in January rewarded the companies most exposed to the US market: Stm rose by 21,7% from the beginning of the year, followed by Fiat-Crhysler (+20%), Diasorin and Luxottica (both above 9%).
bpm extension. GOVERNANCE IS BETTER THAN UBI FOR MEDIOBANCA. Day of decline for: Unicredit -1,2%, after Tuesday's flare-up. Banco Popolare -0,8% and MontePaschi -2,7% were also down, now on the eve of the d Day of the EBA exam. Intesa, on the other hand, rose by 1,2%. But to ensure the fireworks was bpm +3,9% to 0,3205 euro thanks to the fact that Mediobanca, already leader of the underwriting syndicate during the increase, restarted coverage of the stock with positive outperform recommendation and target price at 0,40 euro.
In the report of Cuccia square among other things, it is argued that the bank in piazza Meda is the one with the lowest multiples in the sector (already very depressed on average). Furthermore, for the Mediobanca team "a comparison with Ubi Banca and Banco Popolare shows that the powers attributed to the management of Bpm are much broader".
Insurance is down. Generali fell by 1,9%. Among the companies involved in the large insurance aggregation project, Unipol fell by 5,2%, Milano Assicurazioni fell by 0,8%, Premafin fell by 1,8%. Positive Fondiaria-Sai +1%.
S&P TRUSTS ENI AND ENEL MORE THAN THE TREASURY. Oil companies moved little: Eni +0,1%, Saipem +0,4%. Utilities fell in line with the sector's decline across Europe, the victim of a Nomura downgrade. Enel fell by 1,3%, Enel Green Power -1,2% after being downgraded from Nomura to “reduce” from “neutral”, Atlantia lost 2,2%. S&P meanwhile has downgraded Eni's rating from A+ to simple A, the grade A- for Enel remained unchanged. Both companies have a better judgment than the reference shareholder, the Italian state.
